Multi Asset

Rationalized

April 2025 – 9 min read

Trevor Slaven and Ben Gillingham of Barings’ Multi-Asset Strategy & Allocation team explore how investors can manage risk and capitalize on opportunities in this analysis of the Trump administration’s announced tariffs and their resulting impact on global economies and markets.

The following represents the views and opinions of the Barings Multi Asset Team as of the date indicated and is subject to change at any time without notice. There is no guarantee that any prediction or forecast will materialize.

Executive Summary

High conviction views are challenging when outcomes are subject to the whims of a few individuals and when technical factors can overwhelm the fundamentals
We emphasize being nimble and seeking out positions that can perform in multiple scenarios; small positions can have large impacts in today’s markets
The treasury market will likely be choppy as tariffs stoke fears of inflation and continued budget deficits, counteracting the weaker growth backdrop
In the U.S. rates market, we prefer curve steepening trades as Fed cuts may be seen as an inflationary “policy mistake” that hurts the back-end
We prefer duration exposure in other developed markets like Australia and Europe where inflation will be less of a concern relative to the economic contraction
Owning investment grade (IG) credit on-yield can offer protection across a spectrum of outcomes
Carry-breakevens in high yield (HY) credit offer good long-term value; other post-GFC sell-offs found stability in the mid-9% range; Europe offers value on this basis as well
Hedge portfolios with cash instead of currency bets; FX markets are too subject to countervailing forces today

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Trevor Slaven

Head of Multi-Asset Strategy & Allocation

Ben Gillingham, CFA

Director, Multi Asset Group

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