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Looking at the data and macro trends, the quantitative insights suggest the conditions underpinning more than a decade of non-U.S. equity underperformance may be starting to shift. The three drivers behind it are (1) tariffs are weighing on U.S. household income and may curb consumption; (2) fiscal and economic policy abroad is becoming more proactive; and (3) macro conditions are reshaping relative growth prospects. As growth differentials narrow, there are compelling valuations—and potential capital flows—outside the United States.

In this episode of The Money Maze Podcast, NEPC's Michael Manning discusses the evolving role of investment consultants, highlighting how they help institutional investors navigate complex markets, build resilient portfolios, and make strategic, long-term decisions. The conversation explores whether these consultants are indispensable in an increasingly dynamic investment landscape.

By most measures, the start of the first quarter of 2025 painted a picture of positive economic momentum and optimism in the U.S. Growth remained solid. Unemployment hovered near 60-year lows. Real wages were rising. Corporate earnings were on track for double-digit growth. And then it turned from optimism to uncertainty to sheer panic with the Trump administration surprising markets with a sweeping set of tariffs. By quarter’s end, the tariffs have ignited fears of global trade war, surging inflation, and a material growth slowdown.

Given the impact of the back-and-forth tariffs and the U.S. Department of Government Efficiency (DOGE), the risks of creating a bout of inflation or a bout of economic slowdown (or both) are very real. The uncertainty, market gyrations, and indications of a double-digit market correction at some point during 2025 are also creating tremendous angst. Instead of trying to dodge any market volatility and drawdowns, investors should stay the course. There are mitigating factors to the headwinds of the tariffs and DOGE. There will eventually be clarity.

2025 stands at a crossroads. In the prior year, nearly half of the world’s population across more than 70 countries participated in national elections, artificial intelligence gained considerable traction in the marketplace, and several banks initiated a synchronized interest rate-cutting cycle. Each of these developments alone creates a complex landscape to navigate. Yet, the situation is further complicated by heightened geopolitical risks and an investment environment brimming with uncertainties.