This last week has brought calmer waters for global financial markets, with volatility easing across major regions. It’s a shortened trading week in the UK, Europe, and the US, with markets closed on Good Friday, and UK and European exchanges also shut on Easter Monday.
Markets largely behaved as expected, with tariff-related comments from Donald Trump causing short-term volatility, while any swift policy reversal quickly pushed markets higher. His pause on tariffs and talk of exemptions—particularly for tech—lifted sentiment, while comments about easing auto tariffs drove gains across UK, European, and Asian markets. US Treasury yields also stabilised after last week’s dip.
Trump’s messaging appears characteristically inconsistent—initially hinting at relief for supply chains, before later asserting that “nobody is getting off the hook.” However, markets appear increasingly resilient to this back-and-forth. As anticipated, investors seem to be treating headline volatility as noise rather than a signal of meaningful policy change. With trade negotiations on the horizon and brinkmanship likely to remain a feature of Trump’s strategy, further headline-driven fluctuations are to be expected.
Meanwhile, tensions between the US and China continue to simmer. However, China appears better positioned than expected, supported by diversified trade links and strategic control over key materials. Data revealed that China’s GDP grew by 5.4% year-on-year in Q1—beating expectations of 5.1%. This marks the strongest annual growth in 18 months, underpinned by Beijing’s ongoing stimulus efforts. Despite trade tensions, China’s broad economic base and control over critical resources continue to provide resilience and leverage in negotiations with the US. The rivalry between the world’s two largest economies has long been evident. However, as observed during the last term of President Trump’s administration, beneath the trade tensions lies a significant level of interdependence, which often emerges as a key driver in reaching trade agreements.
As trade discussions continue and geopolitical dynamics remain fluid, the value of global diversification has become increasingly clear. These periods of short-term noise, volatility, and sudden policy shifts are exactly when a well-diversified portfolio proves its strength.
A carefully constructed mix of equities, fixed income, and cash—spread not only across sectors but also across global regions—is essential. Different regions experience varying economic cycles, policy responses, and market performance, helping to smooth returns over time. This diversification helps ensure that no single policy decision or economic event has an outsized impact on overall portfolio performance, allowing investors to navigate a broader range of market conditions with greater resilience.
This global reach also brings practical advantages—especially during regional market closures. For instance, while it’s a shortened trading week across the UK, Europe, and the US, Asian markets remain open, allowing globally diversified portfolios to continue benefiting from market activity and emerging opportunities—even when parts of the West are on pause.
This global diversification includes exposure to developed markets such as the US, where technology and healthcare continue to drive performance, as well as to fast-growing economies like India and China, where long-term trends such as digital transformation and rising consumption underpin structural growth. Sector allocation also plays a critical role, helping avoid overexposure to any single theme through balanced positions across areas such as financials, energy, healthcare, and consumer goods.
Rather than reacting to short-term market noise, this research-led process ensures portfolios remain aligned with your long-term goals while retaining the flexibility to adapt as conditions evolve. Behind this high level of diversification is an active, forward-looking investment approach. Our experienced investment management team are continuously monitoring not only stocks within each region, but also macroeconomic policy and economic data as this is a key contributor to long term portfolio returns.
Kate Mimnagh, Portfolio Economist
