Double Vision:

Dear Clients, Colleagues and Friends,

If you feel a bit dizzy looking at the global economy right now, you aren’t alone. The 2020s were never going to be a quiet decade. Years of suppressed volatility, fiscal restraint and ultra-low interest rates built pressures that were always going to surface eventually. Still, few expected the midpoint of the decade to look quite like this — an economy that often appears to move in two directions at once. 

We call this the Split-Screen World. On one side, the numbers look great. Equity markets have advanced, high-income households remain robust, and the first signs of an AI-driven productivity cycle are emerging. On the other side, the cracks are widening. Sovereign debt has swelled, geopolitical tensions remain elevated, and currencies have become tools of economic strategy rather than simple mediums of exchange.

Markets reflect this same duality. The rally in equities and the strength in gold this year are not contradictions — they are signals of a world that is optimistic about opportunity yet highly conscious of risk. Investors are participating in growth while simultaneously protecting against its vulnerabilities.

Economic data across the world tells a similar story. America looks remarkably resilient in some areas and stretched in others. Europe faces long-standing challenges but is quietly rebuilding the foundations of industrial strength. Many emerging-market countries, once dismissed as uninvestible, now show healthier balance sheets and more disciplined policy than much of the developed world. And AI remains both promising and uncertain — celebrated by some as transformative, viewed with caution by others still waiting for tangible outcomes.

Almost every major trend today is K-shaped. Some things are booming; others are stagnating. Private markets are adjusting downward while public markets move higher. Tariff-targeted regions, in a surprise to most investors, became some of the strongest performers in 2025. These are not anomalies. They are features of an economy where divergence, not uniformity, is the norm.

This environment has created a new challenge for investors: the risk of misinterpretation. We live in a world where there is no shortage of information, but much of it points in different directions. For every data point that supports a bullish narrative, another screams “imbalance”. In this setting, clarity comes not from reacting to individual numbers, but from understanding the deeper macro forces shaping the global landscape.

And beneath the surface, the shifts are significant. Fiscal power has overtaken monetary policy as the dominant economic tool. The real economy — infrastructure, resources, industrial capacity — is reasserting its importance. Leadership in global markets is broadening beyond the United States. Currency dynamics increasingly reflect national strategy. Traditional safe havens are evolving. And AI, despite its uneven progress, is beginning to feed into real productivity gains.

Viewed together, these developments reveal not confusion but a structural transition — a global order that is adjusting to new economic priorities, new geopolitical realities and new technological capabilities.

This year’s 7 Super Trends map that transition. They show how investors can navigate a world of divergence by focusing on the forces that endure: global broadening, fiscal leadership, real economy investment, shifting safe havens, currency realignment and the early stages of a productivity cycle.

At Forstrong, our role is to bring clarity to this environment. We begin with the world, study the global signals that matter most, and build portfolios designed to stay aligned with long-term forces rather than short-term noise. Our hope is that this outlook offers a clear, steady perspective at a time when many signals feel contradictory — a guide for navigating this Split-Screen World with confidence.

Thank you to our clients for your continued trust. It remains a privilege to steward your capital in a time when disciplined, global thinking matters more than ever. We look forward to navigating the road ahead with you.

With appreciation,

Tyler Mordy

Chief Executive Officer and Chief Investment Officer

December 2025

Against this shifting landscape, our global strategies continue to do what they were built for: adapt, stay open to new leadership, and remain grounded in the macro forces shaping the next cycle.

To make sense of those forces, we turn to our 7 Super Trends — the structural themes that define the opportunities and risks ahead for global investors in 2026 and beyond.

Japan, meanwhile, is in the middle of a genuine economic renaissance. Its policy regime is normalizing, corporate reforms are accelerating, and shareholder returns are improving after years of stagnation. Investors who had written off the world’s third-largest economy are now forced to reconsider its role in global portfolios.

Across Asia, the story is one of reacceleration. Supply chains are reorganizing into regional hubs, domestic demand is strengthening, and export cycles are firming. Even China, long dismissed as uninvestable, is shifting policy from damage control toward stabilization. While structural challenges remain, the country’s pivot toward targeted stimulus and more predictable policymaking has helped steady the economic floor.

Commodity-linked emerging markets are benefiting as well. Years of cautious fiscal policy, credible central banks and improving external balances have left many EM economies in far better shape than their developed market peers. Add in rising demand for metals, energy, transportation and engineering capacity, and the global growth map looks far more geographically balanced than at any point in the past decade.

In other words, a broad cast of regions that spent years lagging are now moving into leadership. This is not a temporary burst of activity but the early stages of a multi-year earnings cycle enabled by better policy foundations, healthier balance sheets and more competitive currencies.

 

 

After years of being structurally underweight, global investors are finally confronting a long-overdue rotation toward the rest of the world. Capital is beginning to flow toward Europe, Japan and EM Asia — a shift that is still in its early innings.

Fiscal policy is now the dominant driver of nominal growth. Governments are deploying unprecedented amounts of capital toward infrastructure renewal, energy transition, supply chain resilience and national industrial strategies. In the United States, Europe and Asia, the scale of public investment is reshaping entire sectors and setting the tone for multi-year economic cycles.

This shift removes many of the deflationary pressures that defined the 2010s. Instead of relying on ultra-low rates to coax demand forward, fiscal policy is creating new sources of spending and investment. The result is a world with stronger nominal GDP, more persistent inflationary pressures and broader corporate earnings cycles.

Equally important is the institutionalization of the government rescue reflex. Whether in banking stress, energy crises or geopolitical shocks, policymakers increasingly turn to fiscal support rather than interest rate cuts. Crises that once triggered long recessions now lead to targeted stimulus and faster recoveries.

For investors, this represents a profound regime change. The economic contours of the past decade — low growth, low inflation, low rates — are inconsistent with the fiscal-dominated world now taking shape. Public investment is creating durable demand, reshaping competitive dynamics and driving capital toward sectors aligned with government priorities.

The investment landscape that emerges from this will not look like the 2010s. It will be more cyclical, more inflationary and more conducive to real assets, industrials, infrastructure and companies tied to physical investment.

Corporations are now deploying real capital into automation, robotics, workflow optimization, software tooling and data infrastructure upgrades. These are not speculative investments; they are productivity-driven initiatives designed to address labour shortages, rising wage costs and operational inefficiencies.

This shift is happening across sectors that historically lagged in digital adoption — healthcare networks optimizing diagnostic throughput, logistics firms reducing routing inefficiencies, industrial manufacturers automating low-value processes, and financial institutions modernizing risk and compliance workflows.

After a decade of sluggish productivity growth, the conditions for a genuine acceleration are finally taking shape.

AI is moving from promise to application, from hype to measurable economic impact. Capital expenditure linked to AI is now broadening across regions as well — Japan, Korea and Taiwan are investing heavily in digital infrastructure and automation capabilities.

The winners of this era will not only be chipmakers and hyperscalers. They will be the companies that adopt AI effectively, embed it into their operations and amplify human productivity. These “enablers and adopters” will define the next phase of the cycle.

As AI’s second act unfolds, its contribution to global growth will become more tangible — not through valuation multiples, but through real world productivity improvements.

Governments are now directing enormous amounts of capital toward energy systems, transport networks, grid infrastructure, manufacturing capacity and engineering capabilities.

The pandemic shattered the austerity reflex and created political space for ambitious fiscal programs that prioritize resilience over cost-minimization.

This renewed focus on the real economy is reversing many of the deflationary impulses that defined the 2010s. As fiscal firepower meets rising industrial demand, capacity constraints are emerging in everything from metals to shipping to specialized labour. These bottlenecks are not temporary — they are features of a world reinvesting in itself after a long period of neglect.

For investors, this represents a clear regime change. Real assets, commodities, infrastructure and income-producing sectors are regaining their central place in diversified portfolios. Physical investment cycles tend to be long-lived, supply-intensive and globally coordinated — the exact opposite of the intangible-driven tech surges that dominated the previous decade.

This multi-year capex boom extends well beyond AI and into the material foundations of the global economy. It is the most significant reallocation of capital toward real-economy assets since the postwar period.

This shift is not merely a tactical rotation; it is the foundation of the next market cycle.

The sectors positioned to lead — value, cyclicals, financials, industrials, resource producers — have spent years under-owned and undervalued. As the global economy becomes more balanced and geographically diversified, market leadership will reflect that balance.

Earnings cycles across Europe and Japan are strengthening, supported by currency competitiveness, healthier corporate governance and improving domestic demand. EM Asia is benefiting from regional supply chain integration, rising consumption and favourable policy settings.

The next bull market is unlikely to look anything like the last one. It will be more globally distributed, less concentrated in narrow tech leadership, and driven by a world where multiple regions contribute to growth simultaneously.

Investors anchored to the past decade’s winners may miss one of the most important turning points of the 2020s. Global diversification is again becoming a return driver — not just a risk management tool.

In response, countries across Asia, the Middle East and Latin America are exploring alternatives. Bilateral trade settlements are rising, regional currency blocs are emerging, and reserve diversification is accelerating. While the US dollar remains dominant, its supremacy is becoming more contested.

This shift is changing how currency cycles work. Historically, dollar strength or weakness could be explained largely through interest rate differentials or growth spreads. Today, geopolitics, sanctions risk, trade fragmentation and national-security considerations are equally important.

For investors, currency exposure has become an active source of return as well as a hedge against policy divergence. EM currencies with improving fundamentals, credible central banks and healthier external accounts offer opportunities not seen in years.

The currency landscape is fragmenting — and with it, the assumptions that underpinned the last 30 years of global finance.

This challenges the oldest rule in the book: “Buy Western bonds for safety.” G7 government bonds and reserve currency assets can no longer be considered universally safe. Risks that were once neatly categorized by geography or income level are now far more dispersed. Resilience is emerging in unexpected places; vulnerability is appearing in old strongholds.

A striking divergence is also emerging in alternative stores of value. Crypto thrives on speculation — a liquidity-sensitive, high-beta expression of tech sentiment. Gold thrives on uncertainty — slow, steady and historically reliable when policy appears unmoored. As monetary anchors weaken and geopolitical risks rise, gold’s role as an alternative currency and portfolio hedge is growing.

In a Split-Screen World, even safety must be redefined. The question is no longer “Is this market developed or emerging?” but “Is this balance sheet credible, is this policy framework stable, and is this asset insulated from political risk?”

The new safe-haven landscape requires a far more nuanced, global approach.

What follows is the connective tissue between worldview and action — how we translate global forces into positioning, how we turn signals into structure, and how we build portfolios that stay aligned with the world as it unfolds rather than the world investors remember.

This is the shift from seeing the map to navigating it.

For decades, he was right. We lived in a world of stable institutions, predictable inflation, and prolonged US dominance. A simple North American mix plus bonds worked on autopilot.

That era is long over. The drivers of returns are fragmenting. A new regime of structural divergence is underway.

Most portfolios today contain excellent building blocks. Whether you hold high-conviction single stocks, core ETF positions, trusted third-party managers, or private market allocations, the individual components are often strong.

However, in this new era of fiscal activism and structural inflation, macro is not optional. It is the organizing framework that brings coherence and intention to modern capital.

1. What Macro Actually Is

Macro is often mistaken for dramatic calls or market timing. It is neither.

Instead, macro is a disciplined framework for understanding the structural forces that define returns. It is a strategic, ongoing input that complements, rather than competes with, security selection.

Our top-down approach is defined by three questions:

1. Where are we in the global cycle? This is a reading of the operating environment: How are growth, inflation, and policy evolving? This establishes the current backdrop for every security and region.

2. Which assets align with that backdrop? Macro identifies where the tailwinds are strongest—across regions, sectors, and asset classes—based on prevailing forces like fiscal activity or currency dynamics.

3. How do we combine exposures? The goal is not a single winner. It is to build a mix of exposures that remain resilient across multiple paths. We prepare for different regimes rather than guessing outcomes.

2. Why Macro Matters in a “Split Screen” World

Clients see a world defined by tension and contradiction. A macro lens resolves that tension:

What Clients See

Global Markets: The US feels unstoppable, yet Japan, Europe and Asia are hitting highs. Clients wonder if they are missing out.

What Macro Explains

Leadership is broadening because the global cycle is shifting. Valuations and policy favour non-US markets. This is normal as cycles mature. 

What Clients See

Policy: Governments spend aggressively on infrastructure while central banks cut rates. Clients see mixed signals.

What Macro Explains

Fiscal policy now drives the cycle. Countries investing heavily in physical and digital infrastructure are reshaping where long-term growth will occur.

What Clients See

Assets: AI dominates headlines, yet real-world sectors like metals and manufacturing are surging.

What Macro Explains

The real economy is reasserting itself. AI needs energy, copper, and grids to scale. This is why “old-economy” assets are outperforming again.

What Clients See

Inflation: Price increases are slowing but not disappearing. Clients are unsure whether to play defense or take risk.

What Macro Explains

We are in a new regime. A moderate-inflation, higher-volatility world favours diversified portfolios that include commodity exposure and active currency management.

What Clients See

Geopolitics: Tensions feel higher than ever. Clients fear sudden market shocks.

What Macro Explains

Geopolitics affects capital flows. A global portfolio reduces exposure to single-country shocks and captures opportunities created by regional realignments.

What Macro Explains

Leadership is broadening because the global cycle is shifting. Valuations and policy favour non-US markets. This is normal as cycles mature. 

3. From Worldview to Portfolio: How Macro Shows Up in Practice

In the Forstrong process, macro is not an abstract note. It dictates concrete, globally-aware choices.

Targeting Global Leadership (Example: Chile)
The thesis starts with the structural need for global electrification. Instead of only buying pure producers, we identified Chile. As the world’s largest copper producer and a major lithium source, this single country provided access to both metals just as its broader fundamentals improved. The investment aligns a global trend with a specific regional opportunity.

Reading Regional Signals (Example: Sweden)
We use certain national markets as early indicators. Sweden is deeply linked to global manufacturing. When industrial momentum shifts, Sweden often reflects that change early. This insight gives us an advantage in European equity and currency positioning.

Translating Conditions into Income (Examples: Italy & Singapore)
We look for income created by structural shifts, not just yield. Italy benefits from improving fiscal dynamics that support its banks and utilities. Singapore benefits from strong governance and an economy leveraged to resilient Asian trade.

Using Real Assets as a Structural Hedge (Example: Gold & Energy)
In a world of shifting monetary anchors, real assets are essential tools. Gold acts as an antifragile asset when policy stress rises. Energy exposure is critical when supply constraints drive structural inflation. These are dynamic tools applied when the current regime dictates their relevance.

4. How Macro Fits into Your Portfolio

We understand that most advisors are not starting from scratch. You already have a process—whether that involves stock picking, fund selection, or model building.

The Forstrong macro lens provides the strategic overlay that brings these pieces together. Our core mandates serve three essential functions for your overall investment capital:

1. True Diversification: We broaden the opportunity set. True diversification extends beyond simple asset allocation to align capital with the major forces driving the global economy. This protects portfolios from reliance on any single region or outcome.

2. Active Opportunity: We capture shifting leadership. Global growth is dynamic, not static. We move capital strategically toward emerging growth centers and undervalued markets, positioning portfolios to benefit from change rather than chasing the past.

3. Adaptive Defense: We manage regime risk. Economic climates eventually shift. We actively adjust the asset mix across equities, fixed income, and real assets to preserve capital when environments change and volatility rises.

The objective is simple and powerful: We help deliver portfolios that feel coherent and connected to the world you read about every day.

At the time, China was joining the global economy. The Euro was unifying Europe. Commodity markets were waking up. You could sense history turning even if you could not yet draw the lines. Our founders concluded that if the world moves like this, portfolios need to move with it.

That perspective was rare then. It remains rare today.

Most portfolios are anchored to one country or one static worldview. We built something different: a framework that is fluid, globally aware, and adaptable. We do not offer forecasts. We offer a disciplined way to navigate global shifts. We stay calm when the world moves sideways and adapt when new leadership emerges.

Three principles define how we invest:

1. We start with the whole world
The global economy is too interconnected to rely on one region. Beginning with a global mandate gives us a broader canvas. It creates more opportunity and leaves fewer blind spots.

2. We move with the currents
Global conditions tilt and turn. Policy shifts ripple outward. Liquidity rises and retreats. We allow our positioning to adjust with these structural changes. This keeps portfolios aligned with the world unfolding ahead, not the cycle that has already passed.

3. We use the best tools available
We search the entire ETF universe with purpose. Nothing enters the portfolios out of habit. Some holdings drive opportunity. Others soften shocks. Together they create a balanced, precise expression of the global landscape.

At Forstrong, we build teams the same way we build portfolios, by combining different strengths rather than relying on a single viewpoint. Our investment team brings together professionals of different ages, backgrounds, experiences and cultural perspectives. These differences are intentional. They give every discussion more depth and every decision a wider base of evidence.

Our process reflects this structure. The team meets frequently to review global signals, challenge assumptions and refine the firm’s macro views. Each member contributes a distinct lens. Some focus on sentiment and the big picture. Some bring fundamentals and detail. Others concentrate on trading, flows and market structure. Together, these perspectives create a balance that no single discipline can achieve on its own.

This is how our strategies are formed: through steady discussion, careful reconciliation of competing views and clear preference for decisions that hold up across different scenarios. It is a process that keeps us anchored in reality rather than ideology and helps shape portfolios that are genuinely built for what is next.

How our team is structured:

Forstrong’s investment team works as a single integrated unit with two formal forums.

The Portfolio Management Team leads daily portfolio design and implementation, while the Investment Committee brings the same professionals together with our senior advising members to test ideas, challenge assumptions and set long term direction. The structure is complementary. It ensures that decisions benefit from both constant attention and periodic wide-angle review.

Portfolio Management Team
Responsible for ongoing portfolio construction, positioning and risk management under the leadership of our Chief Investment Officer.

Investment Committee
A broader decision forum that includes the Portfolio Management Team and our senior advising members. Its role is to identify major macro themes, refine long term strategy and provide oversight to the day to day process.

The people behind the process:

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