Savana Asset Management highlights the US as the leading global equity market, driven by robust economic growth, AI investment surges, and investor-friendly policies. Their insights reveal why Australian investors might look across the Pacific for growth opportunities.
- US GDP growth and labour productivity outpace OECD peers
- US tech giants boost AI infrastructure investment by 66% in 2025
- Pro-growth US policies include deregulation and 100% bonus depreciation
- Savana’s US Small Caps Active ETF (SVNP) shows strong risk-adjusted returns
- Gold.Com’s rebranding drives significant share price and trading volume gains
US Economic Leadership Amid Geopolitical Noise
In a world where geopolitics increasingly sway markets, Savana Asset Management’s latest investor letter underscores the United States as the most compelling equity market globally. Despite political turbulence and market jitters, the US economy continues to demonstrate resilience and leadership, particularly when compared to other developed nations.
Recent data for the third quarter of 2025 shows the US economy growing at an annualised rate of 4.4%, with labour productivity surging 4.9%; the strongest since late 2023. This productivity edge, driven by innovation, flexible labour markets, and lower energy costs, contrasts sharply with stagnation or decline in Australia and Europe, positioning the US as the growth leader among OECD countries.
AI Investment Fuels the Next Growth Wave
The US remains the global hub for technological innovation, with major players like Amazon, Microsoft, Alphabet, and Meta investing a combined A$329 billion in AI infrastructure in 2025; a 66% increase year-on-year. This surge not only expands the economy’s productivity frontier but also stimulates broader sectors such as construction and advanced manufacturing. According to S&P Global, AI-related investments accounted for approximately 80% of private domestic demand growth in the first half of 2025, highlighting the transformative impact of technology on economic activity.
Investor-Friendly Policies Underpin Growth
Beyond market fundamentals, Savana points to the US’s pro-growth policy environment as a key driver of investment appeal. The One Big Beautiful Bill (OBBB) deregulated high-multiplier sectors like energy and infrastructure and reinstated 100% bonus depreciation, allowing companies to deduct the full cost of qualifying investments immediately. Combined with a low effective corporate tax rate near 10%, these policies enhance the net present value of projects and encourage larger, earlier capital deployment. Coupled with expected monetary easing and sustained fiscal spending, these factors create a fertile environment for risk assets in 2026.
Savana’s SVNP ETF – Consistent Outperformance
Savana’s US Small Caps Active ETF (SVNP) exemplifies disciplined, data-driven investing. Since inception, SVNP has achieved an Information Ratio of 1.25, indicating excellent risk-adjusted returns relative to its benchmark. Impressively, SVNP has outperformed across all measured periods, maintaining a 100% batting average. This consistency suggests a robust strategy capable of delivering excess returns while managing volatility; an attractive proposition for investors seeking exposure to US small-cap equities.
The Power of Branding – Gold.Com’s Market Impact
The letter also highlights a fascinating case study in market perception with Gold.Com (formerly A-Mark Precious Metals). After rebranding and switching its listing to the NYSE with a new ticker “GOLD,” the company’s share price surged 74% within two months, accompanied by a fourfold increase in daily trading volume. This episode illustrates how cosmetic changes and investor sentiment can significantly influence stock performance, independent of fundamental changes; a reminder of the nuanced dynamics at play in equity markets.
For Australian investors facing challenges such as declining corporate profits and inflationary pressures at home, Savana’s analysis offers a compelling argument to consider the US market’s growth and innovation potential. With the Australian dollar near three-year highs against the US dollar, the timing may be favourable for increased exposure to America’s dynamic equity landscape.
Bottom Line?
As geopolitical noise fades, the US’s economic fundamentals and innovation-driven growth set the stage for a promising 2026 in equities.
Questions in the middle?
- How will the new Federal Reserve chair influence US monetary policy and market sentiment?
- Can the US sustain its AI investment momentum amid global competition and regulatory scrutiny?
- Will Australian investors increase allocations to US equities given currency and growth dynamics?