What Investors Could Expect From the 2025 Equity Markets

Jeff Weniger, CFA, Head of Equity Strategy at WisdomTree, recently participated in a panel during the VettaFi 2025 Market Outlook Symposium. During the panel, Weniger discussed the overall diffusion the general public has in regards to expectations for equities over the next twelve months. 

Despite the uncertainty of the general public, Weniger asserted that “the bulls have the upper hand.” As for why, he explained that the one moment that equities were truly rattled in 2024 was when the 10-year U.S. Treasury Rate approached 5%. With the 10-year currently sitting closer to 4.25%, the bond market, and by extension the equity market, look to be in a good place. 

Moving on, panel moderator Cinthia Murphy showed mid-symposium polling on what participants view as the biggest risk to capital markets in 2025. “Geopolitical Risk” was the top-voted answer, accounting for about 45% of respondents. 

As for why Geopolitical Risk dominated the answer pool, Weniger associated it with how the weekend’s developments on Syria are weighing on respondents’ minds. He was also surprised to see the “Federal Reserve” only account for about 12% of respondents. Weniger explained that he expected around 25-30% of the respondents to vote for the Fed. 

Looking ahead to 2025, Weniger highlighted how Chinese equities have recently had positive movements, due in part to a new Chinese stimulus package. Strong drivers of growth for the Chinese market are critical right now, according to Weniger, because countries like China and India “are economies that matter much more than they did a quarter century ago.” 

While many investors are trying to anticipate the size and severity of President-elect Trump’s planned Tariffs, Weniger noted that the FTC is also worth monitoring. Changes in the FTC and its antitrust regime in DC could spell well for large caps, according to Weniger. 

Jeffrey Mayberry, Portfolio Manager at DoubleLine, also participated in the panel. While many investors are aware of the dominance of mega-cap tech names, Mayberry advised that diversification will be important in 2025. 

Even though the mega-cap tech companies have steamrolled through growth in 2024, these gains cannot last forever, according to Mayberry. Though Mayberry noted that “something’s gotta give” in regards to their momentum, he did not expect a mega-cap pullback to be at the extent of something like the dotcom bubble. 

While the mega-caps shouldn’t be expected to “go to zero”, Mayberry noted that they could very well recede to more normal large-cap levels. As such, he highlighted the importance of diversifying one’s large-cap exposure, such as using an equally weighted strategy. 

“There is this feeling of concentration risk, whether the Mag 7 go on to continue outperforming or not,” assessed Weniger. He also noted that investors and advisors should be wary of the risks of portfolio drift.

As an investment option, Weniger highlighted the WisdomTree US Quality Dividend Growth Fund (DGRW A). DGRW offers a distinct quality focus to help locate strong performing U.S. companies. 

This is paired with a dividend screen, which helps taper off the fund’s similarities to the NASDAQ. By adding a dividend screen, “you can create a blend fund that’s passing a lot of the valuation and profitability checks,” added Weniger. 

Fund flows for DGRW highlight how investors and advisors are opting for the WisdomTree strategy heading into 2025. As of December 9th, 2024, the fund has seen net flows of over $140 million in the past month alone. 

To watch the full symposium and receive CE credits, register for the replay here.

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