It seems we’re back here again
This week, President Trump announced a fresh wave of proposed tariffs — and while it didn’t send markets into a full spin as it did back in April, it still managed to rattle sentiment. Volatility indices picked up, and the reminder was clear: trade remains a live wire.
Trump, complaining on Thursday that the 27-member EU bloc had been "very difficult to deal with" and that negotiations were "going nowhere", proposed a sweeping 50% blanket tariff on all EU imports. If enacted, it would mark one of the most significant trade interventions of his campaign so far.
But it was the more targeted threat that caught the market’s eye: a proposed 25% tariff on any iPhones not manufactured in the US — a direct challenge to Apple, which has been expanding operations in India rather than reshoring production.
At face value, it may sound like political posturing. But there’s a deeper story here. The idea of bringing manufacturing home — reshoring — isn’t new, but it’s far from simple. Apple’s supply chain is vast, global, and deeply embedded in Asia. Shifting meaningful production to the US would take years and bring significant cost implications, not just for Apple, but potentially for the broader tech sector and the consumer.
That said, the market’s response was relatively restrained compared to the sharper fall in April. Apple shares dipped around 4% — notable, but far less dramatic than the 22% pullback seen last month. The Nasdaq edged lower, European indices softened, but this time around, investors seemed more composed. Markets hate surprises. This wasn’t one, and we will have to watch out quickly these proposals can be taken back off the table.
Looking back to look forward
It’s easy to forget how far we’ve come.
Despite the turbulence of 2025 — from the rolling tariff headlines to geopolitical uncertainty and sticky inflation — markets have shown remarkable resilience. As Mark Bousfield pointed out in last week’s update, the volatility sparked by trade policy has been both unexpected and instructive. Yet amid the noise, the recovery has been swift.
In fact, the MSCI World Index has surged almost 15% (in GBP terms) from its April low — marking the fastest rebound since the Covid crisis in 2020. U.S. markets have led the charge, fuelled in no small part by the continued dominance of the “Magnificent Seven” tech names.
How have our funds fared?
This is why our strategies continue to favour global and diversified thematic exposures — particularly targeting quality businesses with strong domestic demand, resilience and pricing power. These qualities come into their own when trade frictions and political noise start to dominate headlines.
Our Higher Income and Income Funds have held firm, supported by a blend of shorter- duration bonds and high-quality, dividend-paying equities and specialist income managers. As at the time of writing, these funds have returned 3.3% and 2.4% year-to-date, respectively.
Within our equity-focused range, the Global Blue Chip Fund has weathered the volatility better than the challenging broader market. Year-to-date, it has returned -3.1% compared to -4.18% for the MSCI World Index (in GBP terms). Recent additions — including Uber, and utilities such as Siemens and RWE — have helped diversify the portfolio and enhance resilience, while the underlying quality of the portfolio continues to provide long-term confidence.
As ever, we remain focused on the long term. Risks like tariffs won’t disappear — but experience has shown that a calm, disciplined approach, paired with quality underlying exposure, is the best way to navigate through the noise.
