Global Trends and Relevance for Investors – April 2025

Global Trends Overview (April 2025)

1. Market Volatility Due to Tariffs:
   • New US tariffs impacted global equities, with the S&P 500 experiencing its worst daily decline since 2020 before recovering as tariff plans were scaled back
   • European and UK markets also faced heightened volatility, reflecting global trade tensions
   • Asia showed mixed results – India and Japan rose, while China declined
2. Macroeconomic Indicators:
   • US inflation fell from 2.8% to 2.4%, primarily due to a drop in gasoline prices
   • US GDP contracted by -0.3%, and consumer confidence dropped
   • Eurozone inflation remained steady at 2.2%, while GDP grew 0.4%. Hiring intentions declined
   • UK inflation slowed to 2.6%, supported by lower fuel and digital entertainment prices
3. Performance Highlights of the Fund:
   • The fund delivered positive absolute returns, outperforming its benchmark (MSCI World Consumer Discretionary Index)
   • Key sectors contributing to performance included:
     • Communication Services (notably entertainment)
     • Consumer Discretionary (especially retail, education services, and travel)
     • Information Technology
4. Top Performing Stocks:
   • Netflix: Strong revenue, profit, and guidance made it resilient, even in downturns
   • MercadoLibre: Outperformed due to strong volumes, profits, and minimal tariff exposure
   • Tesla: Benefited from tariff pauses and new approvals in China; seen as a long-term play on autonomous tech
   • Nintendo: Pre-orders for Switch 2 surged post-tariff adjustments; strategic manufacturing shifts supported performance

Implications for Investors

• Resilience Amid Volatility: Despite global economic and geopolitical pressures, select consumer and tech companies demonstrate resilience and growth potential
• Sector Selection Matters: Outperformance was driven by strategic allocation to high-growth sectors like entertainment, digital platforms, and e-commerce, reinforcing the importance of targeted exposure
• Long-Term Innovation Play: Stocks like Tesla and MercadoLibre indicate that innovation and regional strategy (e.g., low tariff exposure, shifting production) are key in value creation
• Diversified Global Exposure: The fund offers investors access to global consumer and tech trends across geographies, which helps spread risk and tap into growth opportunities beyond domestic markets

Reference: All insights are drawn from the Invesco Global Consumer Trends Fund Update – April 2025 by Invesco.