Quarterly Report: April 2025

Global markets entered the second quarter with stable fundamentals, but the April 2nd U.S. tariff escalation triggered a sharp risk-off response. The size and scope of the measures —raising average tariff levels to their highest in a century— have disrupted sentiment, rattled valuations, and accelerated a broad repricing across equities, credit, rates, and currencies.

The policy shock has exposed the fragility of concentrated trades and revealed deep market dispersion. U.S. mega-cap equities and credit have come under pressure, while European and Asian assets have gained on fiscal and industrial policy momentum. Visibility has deteriorated across asset classes, and volatility is being driven more by policy than by fundamentals.

In this environment, portfolios should be rebalanced toward more resilient exposures. This includes increasing ex-US allocation, defensive sectors, high-quality bonds, structured products with built-in protection, and private market strategies that offer long-term potential with lower correlation to public markets. Diversifying across regions and actively managing exposures will be key to preserving capital and capturing selective opportunities in a volatile policy-driven landscape.

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