Goldman Sachs' Strategic Asset Allocation and Macroeconomic Tailwinds: A 2025 Guide to Global Risk-On Sentiment and Equity Positioning

In Q3 2025, Goldman Sachs' strategic asset allocation signals and macroeconomic analysis paint a nuanced picture of global risk-on sentiment. Amid heightened geopolitical tensions and trade policy uncertainties, the firm advocates a “moderately pro-risk” stance, emphasizing diversification, income generation, and tail-risk hedging. This approach reflects a delicate balance between optimism for structural growth drivers and caution against near-term volatility.

Strategic Asset Allocation: Diversification as a Core Theme

Goldman Sachs' Q3 2025 Strategic Asset Allocation report underscores the importance of broadening equity exposure beyond U.S. mega-caps. Family offices, surveyed in the 2025 Family Office Investment Insights report, have increased public equities to 31% of portfolios (up from 28% in 2023) while reducing private equity allocations to 21% (from 26%) and boosting private credit to 4% (from 3%). The firm highlights opportunities in Europe and small-cap stocks, where structural shifts—such as higher tariffs and infrastructure spending—create value. For instance, 39% of family offices plan to increase private equity exposure, while 38% aim to boost public equities, the report found.

Fixed income remains a cornerstone for diversification, with 11% of family office portfolios allocated to bonds, up from 10% in 2023, according to the same survey. Goldman Sachs also emphasizes private markets, particularly private credit and real estate, as sources of attractive risk-adjusted returns. The report further notes that 86% of family offices are invested in AI, primarily through public equities, and 33% hold cryptocurrencies, reflecting a growing appetite for yield and innovation.

Macroeconomic Tailwinds: Growth, Policy, and Structural Shifts

Goldman Sachs' macroeconomic outlook identifies several tailwinds for risk-on sentiment. The U.S. economy is projected to grow at 2.5% in 2025, outpacing other developed markets, driven by fiscal stimulus and resilient consumer demand, according to Goldman Sachs' Macro Outlook 2025. While higher tariffs pose headwinds, the firm argues that policy support—particularly in infrastructure and defense—could offset some of these challenges. For example, Germany's increased defense spending is expected to catalyze medium-term growth in the Euro Area.

Emerging markets are also gaining traction, with Goldman Sachs highlighting their potential to outperform due to domestic demand and policy easing. However, U.S. tariff uncertainty remains a drag, and the outlook projects global growth will decelerate to 2.1% in 2025 from 2.4% in 2024. The firm's analysis also underscores the role of AI and digital assets: 58% of family offices anticipate being overweight in the technology sector by 2026, the family office survey indicates.

Sector and Regional Opportunities: Beyond the U.S.

Goldman Sachs recommends a strategic tilt toward sectors and regions with durable growth potential. In equities, the firm favors U.S. tech and communication services—driven by AI adoption—and international markets like Japan, Hong Kong, and emerging economies, where valuations are more attractive, as highlighted in its Market Know-How 3Q 2025. For example, Japanese equities benefit from fiscal stimulus and corporate governance reforms, while emerging markets offer upside from commodity demand and currency normalization.

In fixed income, high-yield bonds and sovereign debt in non-U.S. markets (e.g., Italian BTPs, UK Gilts) are preferred over Japanese bonds due to their yield advantages. Private credit and infrastructure investments are also highlighted for their diversification benefits and resilience to interest rate cycles, the family office report observes.

Implications for Investors: Balancing Risk and Reward

Goldman Sachs' framework suggests a dual strategy: capitalize on growth in U.S. tech and international equities while hedging against geopolitical and trade policy risks. The firm advises investors to:
1. Diversify geographically: Allocate to Europe, Japan, and emerging markets to reduce U.S. market concentration.
2. Prioritize income generation: Use fixed income and private credit to offset equity volatility.
3. Adopt tail-risk hedges: Position for potential market corrections through liquid alternatives and defensive sectors.

The firm's cautious optimism is tempered by the acknowledgment that global growth will weaken in 2H2025 due to trade barriers and policy uncertainty. However, structural trends—such as AI-driven productivity and fiscal stimulus—provide a long-term tailwind for risk assets.

Conclusion

Goldman Sachs' Q3 2025 outlook reflects a world where investors must navigate both macroeconomic headwinds and structural opportunities. By broadening equity exposures, leveraging income-generating assets, and hedging against volatility, investors can position portfolios to thrive in a complex environment. As the Asset Management 2025 report notes, the “great convergence” between traditional and alternative asset management is reshaping the landscape, with innovations like active ETFs and semi-liquid products unlocking new value. For now, the key lies in balancing patience with agility—a lesson as relevant for family offices as it is for institutional investors.