Kamblevicius believes investors risk overlooking the breadth of opportunities emerging across global markets as AI-related investment expands well beyond the dominant mega-cap technology names.

Speaking about the outlook for global equities, Kamblevicius said markets continue to be underpinned by resilient earnings growth across regions and sectors.

“While valuation multiples are elevated in some parts of the market, the earnings story we’re seeing globally remains incredibly encouraging,” said Kamblevicius.

“As long as companies continue to deliver earnings growth, equity markets can still generate strong returns without valuations needing to expand further.”

Kamblevicius said investor attention remained heavily concentrated on a small group of AI-linked technology companies, despite AI now spreading much more broadly across the global economy.

“AI beneficiaries stretch across a much broader supply chain than many investors realise,” he said.

“It’s not just chip designers like Nvidia. There are opportunities across semiconductor manufacturing, electrification, utilities, cooling systems, data centre infrastructure and industrial manufacturers globally.

“The capital expenditure that is coming into the market starts to benefit companies further down the supply chain; the companies that do cooling systems for the data centres, the companies that do wiring for the data centres. Micron (NASDAQ: MU), for example, is (as of Friday 22 May) the fourteenth largest company in the world from being very unknown 12 months ago.

“In Japan and Europe, parts of the industrial sector continue to offer attractively priced businesses with strong profitability and compelling long-term growth stories,” he said.

Kamblevicius also warned investors against focusing too narrowly on perceived risks within large-cap technology stocks while overlooking valuation pressures elsewhere in the market.

“Sometimes investors become too focused on the areas most discussed in the media while missing risks developing elsewhere. There are pockets of the market outside technology that are trading at much more difficult-to-justify valuations.”

He said heightened stock-level volatility and geopolitical uncertainty are making portfolio diversification and disciplined risk management increasingly important for investors.

“Single stock volatility is significantly higher than overall market volatility, which means position sizing and diversification are becoming increasingly important in protecting investor capital,” he said.

Kamblevicius said despite ongoing geopolitical tensions and market volatility, the combination of resilient earnings growth and expanding investment opportunities across sectors continued to support the long-term outlook for global equities.

“Until the earnings story becomes challenged, we continue to see solid opportunities for investors in global equity markets,” he said.

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Simon Doyle

Schroders Australia has launched a new active ETF, the Schroder Global Core Fund – Active ETF (ASX: CORE), bringing its total active ETFs to five across a diverse range of asset classes, including global equities, fixed income, multi-asset, and Australian high yield credit.

CORE is an actively managed, quantitative global equity strategy with over 25 years of performance history, and outperformance in 20 of those years. The underlying strategy has assets under management of more than AUD$30 billion across institutional and retail investors. It offers an important middle ground between passive investing and more concentrated fundamental approaches, aiming to outperform while limiting index relative risk, and is competitively priced at 0.25% p.a. management fee and no performance fee.

The strategy employs a mix of quantitative analysis and fundamental insights to identify compelling investment opportunities focused on value and quality from a broad universe of over 15,000 companies, resulting in a portfolio of typically 400+ global companies. This diversified approach mitigates risk by spreading exposure across various sectors and regions and has allowed the strategy to outperform its benchmark in 20 out of the last 25 calendar years.

CORE complements Schroders Australia’s existing suite of four Active ETFs; the Schroder Absolute Return Income Active ETF (CBOE: PAYS), the Schroder Real Return Active ETF (ASX: GROW), the Schroder Global Equity Alpha Active ETF (ASX: ALPH), and the Schroder Australian High Yielding Credit Fund Active ETF (CBOE: HIGH).

As an early pioneer in Australia’s active ETF market, launching ASX: GROW in 2016, Schroders has continued to demonstrate its commitment to innovation in investment solutions.

“The investment landscape is ever changing, and Active ETFs have been a part of that. They play a vital role in democratising active management with easy access to valuable active investment capabilities.  We are delighted to launch an Active ETF for Schroder Global Core Fund today and offer investors access to our successful long-standing global enhanced index strategy and team.” states Simon Doyle, CEO of Schroders Australia.

Lukas Kamblevicius, Co-Head of Schroders QEP Investment team, says the underlying strategy has a strong 25-year track record through multiple economic cycles.

“Since the inception of the Schroder QEP Global Core strategy, markets have presented a variety of opportunities and challenges. Throughout this, our primary goal has been to embed stability for portfolios through strict risk management.

“The strategy has demonstrated strong long-term performance, consistently outperforming its benchmark, the MSCI World Index. We have generated returns consistently in 20 out of 25 years, delivering close to 1% outperformance (composite, gross of fees) on an annualised basis since inception in January 2000.

“With a strong probability of higher volatility in equity markets in 2025 we are well placed through our combined quantitative and fundamentals approach to generate modest, yet consistent, outperformance through the business cycle.”

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