As global markets navigate uncertainty, numerous money managers are opting for a more cautious approach. With trading volumes in U.S. Treasuries declining, investors are hesitating to make significant moves. This hesitance is particularly evident as they await President Donald Trump’s impending announcement on reciprocal levies, which is set to be revealed next week. While some are adopting protective strategies, many are also ready to re-enter the market if this announcement can finally clarify the ongoing tariff debates that have unsettled investors for months.
Market Reactions to Tariff Uncertainty
According to Anders Faergemann, co-head of global fixed income for emerging markets at Pinebridge Investments, a clearer understanding of the U.S. administration’s tariff strategy could trigger a much-needed market rally. “If clarity emerges regarding the tariff situation, an unexpected relief rally could follow,” Faergemann explained. However, he also warned that “the worst outcome would be another looming deadline.” Many investors, including Faergemann, are gravitating towards safer assets, pulling away from emerging-market bonds and focusing on higher-quality investments that are less vulnerable to fluctuations in U.S. economic growth.
Strategic Preparations by Fund Managers
Xin-Yao Ng, a fund manager at Aberdeen Investments, echoes this sentiment. He emphasizes the unpredictability of Trump’s actions, stating, “Predicting Trump’s next move is a fool’s errand.” His strategy focuses on investing in companies that can withstand tariff-related pressures. “We aim to capitalize on any market volatility to find bargains during significant downturns,” Ng added.
Meanwhile, Anthony Kettle, a senior portfolio manager at RBC BlueBay Asset Management, reflects on previous strategies involving long positions in the U.S. dollar, which have recently faced challenges due to a decline in U.S. sentiment. He suggests that utilizing equity instruments, such as put options on stocks, may provide better portfolio protection. “Positioning for Trump’s policy changes has proven difficult due to their seemingly erratic nature,” Kettle noted. “We are still committed to our favorite emerging market fixed-income assets, but we are adopting a more conservative risk profile with additional equity hedges.”
Insights from Industry Leaders Ahead of the Tariff Deadline
As the April 2 deadline approaches, various financial experts share their insights:
- Priya Misra, Portfolio Manager at JPMorgan Asset Management
- Ed Al-Hussainy, Rates Strategist at Columbia Threadneedle Investments
- Greg Lesko, Portfolio Manager at Deltec Asset Management (focused on emerging markets)
- Bipan Rai, Head of ETF Strategy at BMO Asset Management
- Brent Donnelly, President of Spectra FX Solutions
- Rajeev De Mello, Global Macro Portfolio Manager at Gama Asset Management SA
- Lauren van Biljon, Senior Portfolio Manager at Allspring Global Investments
- Matthew Amis, Investment Manager at Aberdeen
- Craig Inches, Head of Rates and Cash at Royal London Asset Management
- Cary Yeung, Co-Head of EM Corporate and Head of Greater China Debt at Pictet Asset Management
- Cheuk Wan Fan, Asia Chief Investment Officer for HSBC Global Private Banking and Wealth
- Nicholas Chui, China Equity Portfolio Manager at Franklin Templeton
- Xin-Yao Ng, Fund Manager at Aberdeen Investments
With expert insights flowing in, investors remain on high alert, ready to adapt to whatever economic shifts may come following the looming announcement.
