As global markets digest the impact of renewed tariffs, political volatility, and rising rates under Trump’s second term, InvestmentMarkets brought together two leading fund managers to debate the biggest question facing investors in 2025: Is the S&P 500 still a good place to put your money?
With valuations stretched and policy risks high, many investors are considering the dominance of US equities in their portfolios. To help cut through the noise, Sam Chipkin, founder and chief investment officer of 5AM Capital, and George Clapham, founding partner, Eight Bays Investment and Portfolio Manager, EQT Eight Bays Global Fund, offered different perspectives on where value lies and how to navigate the current landscape.
“The S&P 500 is expensive, concentrated, and vulnerable to policy shocks,” said Chipkin. “Valuations are pricing in perfection and that’s not the environment we’re operating in. We believe Australian investors should look beyond the US for quality global opportunities.”
Chipkin’s fund is underweight US equities, favouring high-quality monopolistic businesses across Europe, Asia and the United Kingdom that offer more compelling valuations.
“US equities are priced at around 22 times forward earnings, that’s a significant premium to other major markets,” he said. “We’re finding better value in places like Europe and Japan. For example, we hold Eurofins Scientific, a global leader in lab testing, and Hemnet, the ‘REA Group’ of Sweden, both operate in essential sectors and trade at more reasonable multiples.”
He also raised concerns about the growing fragility of the US market, particularly the role of passive investing. “One-third of the S&P 500’s market capitalisation sits in just seven stocks,” Chipkin said. “Passive flows have created a flywheel effect. When momentum reverses, that can unwind fast, and fundamentals often get ignored in the process.”
By contrast, Clapham’s EQT Eight Bays Global Fund remains exposed to US markets - particularly to dominant players in industries like semiconductors, cloud services and cybersecurity.
“We invest by sector, not by geography,” Clapham said. “And the reality is, most of the innovation is still coming from the US. With the right positioning, volatility creates opportunities not just risk.”
Clapham explained that many US tech companies are global in their earnings exposure, with more than half of their revenue coming from outside America. “We’re not buying the US economy; we’re buying world-class industry leaders. Our holdings include sector-specific exposure to AI, cloud computing, and cybersecurity, where US companies are ahead of global competitors.”
He also pointed out that there is still value within the US market. “While the S&P’s largest companies are expensive, many small to mid-cap stocks are far more attractively priced. The Russell 2000 hasn’t seen the same valuation stretch, and that’s where we’re seeing upside potential.”
While their outlooks differ, both fund managers agree that Australian investors need to be especially thoughtful about portfolio concentration, valuation risk, and macro conditions. They also share concerns about inflation, debt sustainability and potential earnings downgrades across US markets.
So, what does all of this mean for Australian investors? According to Darren Connolly, Chief Marketing Officer at InvestmentMarkets, activity on the platform has shifted amid concerns around valuations and policy uncertainty. The trend points to a more cautious, selective approach with a noticeable move away from broad exposure to the S&P 500 and toward more targeted strategies.
“Home country bias is a big issue for local investors, and Australia has its own economic challenges,” said Connolly. “Diversifying internationally has often meant the US, and while the S&P has been a winning investment in recent years, the focus has clearly shifted towards a more risk-on approach.”
“Sam and George’s insights are well worth the time for any investor considering their exposure to international equities. Opportunities still exist but smart positioning is everything.” The full debate is available to view HERE