Market Update - 9th April 2025
On Tuesday, 8th April, the CAM Investment Committee met for an ad-hoc meeting having considered the US Presidential pronouncements and global reactions. Following the short communication we produced over the weekend, I wanted to write to update you on our thoughts in terms of market performance, tariff negotiations, and any potential asset allocation changes.
Starting with markets, equities have been down double digits across the board following "Liberation Day". The exceptions have been a few of the more domestically growth-led economies, such as India, where performance is less reliant on global trade. As I commented a few days ago, fixed income has continued to act as a good hedge against falling equity markets, and several of our core bond funds have produced positive returns over the last week. A promising development has been the performance of our renewable infrastructure assets, with our top-performing name in positive territory since Trump’s announcement.
Moving on to the tariff consequences themselves, the narrow window for trade (and tariff) negotiations between the US and individual countries has, so far, proven busy. Some countries, such as Vietnam and Cambodia, have slashed the tariffs they charge on US-imported goods, while others, like China, have placed retaliatory tariffs on the US. We expect a mix of concessions and retaliatory tariff announcements in the coming days and weeks, and as a consequence, volatility is likely to remain elevated.
In terms of what this all means for your portfolio, for the time being, we have decided not to enact any knee-jerk changes. There are several markets we are closely monitoring, and we are ready to make changes when we deem them appropriate. To give you an example of our thought process: Europe is a market we have been closely analysing, and we like the setup in the long term. The market is cheap, the EU is further through its interest rate cutting cycle than other developed markets, energy prices have fallen (which is a big help), and deregulation is expected in the coming years. The EU has also committed to more spending on defence, renewable energy, and infrastructure, which is much needed and should help drive growth.
To provide you with some comfort at a time when markets are falling, we would like to emphasise that a useful byproduct of the way we invest at CAM is the level of income that our portfolios generate. This adds a level of protection in itself, and it also helps us make distributions to specific clients if their circumstances require.
We will continue to monitor the situation closely and refrain from making moves in your portfolio based simply on prevailing news flow. Our evidence-based approach in times of volatility becomes more important than ever.
As always, please contact a member of your usual CAM team if there is anything you would like to discuss.
Ross McKnight, CFA
Ross joined CAM in 2024 and is a Senior Investment Analyst. He is involved in multi-asset research and is a member of our asset allocation committee. Ross previously worked as a Research Analyst at WH Ireland and is a CFA Charterholder. One of his biggest career highlights to date was being named in Citywire’s “30 Under 30” to watch. Ross is also a member of the Ireland Funds Great Britain Young Leaders Society, which is a philanthropic network that supports worthy causes in Ireland and around the world. Outside of work, he also enjoys reading and cooking, and is a keen sportsman, playing both cricket and football in his spare time.
