According to a Bloomberg report, investors in financial hubs like New York, London, and Hong Kong are reducing their investment risks leading up to the upcoming announcement on tariffs. They are keeping cash on hand to seize opportunities as they arise.
Investors worldwide are adopting a neutral stance, scaling back risk, or de-risking their portfolios. Trading in Treasuries has decreased as traders avoid making significant bets, opting for options trades as a form of protection before President Trump reveals reciprocal tariffs next week.
Despite this caution, many investors remain ready to re-enter the market, especially if the tariff announcement provides clarity and ends the ongoing market turbulence caused by tariff uncertainties.
Anders Faergemann, co-head of emerging-markets global fixed income at Pinebridge Investments in London, anticipates a potential relief rally if there is more transparency regarding the administration's tariff strategy, highlighting the importance of clarity amid uncertainty. Like others globally, Faergemann has shifted towards safer assets, moving away from risky emerging-market bonds and focusing on higher-quality investments less reliant on US economic growth.
Xin-Yao Ng, a fund manager at Aberdeen Investments in Singapore, echoes the sentiment of preparing for uncertainties posed by Trump's decisions. Ng emphasizes the importance of investing in companies less vulnerable to tariff impacts and capitalizing on market volatility for potential buying opportunities.
Anthony Kettle, a senior portfolio manager at RBC BlueBay Asset Management, mentions the challenge in predicting Trump's policy decisions due to their unpredictable nature. Kettle emphasizes using equity instruments for portfolio protection, suggesting that options on US stocks could provide a safeguard.
As the tariff deadline approaches on April 2, investors are adjusting their strategies, with some reducing risk budgets and seeking additional hedges to safeguard their portfolios against unpredictable policy shifts.