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

The document is for informational purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service. The material herein was prepared without any consideration of the investment objectives, financial situation or particular needs of anyone who may receive it. This document is not, and must not be treated as, investment advice, investment recommendations, or investment research.

In making an investment decision, prospective investors must rely on their own examination of the merits and risks involved and before making any investment decision, it is recommended that prospective investors seek independent investment, legal, tax, accounting or other professional advice as appropriate.

Unless otherwise mentioned, the views contained in this document are those of Barings. These views are made in good faith in relation to the facts known at the time of preparation and are subject to change without notice. Parts of this document may be based on information received from sources we believe to be reliable. Although every effort is taken to ensure that the information contained in this document is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information.

Any forecasts in this document are based upon Barings opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Any investment results, portfolio compositions and/or examples set forth in this document are provided for illustrative purposes only and are not indicative of any future investment results, future portfolio composition or investments. The composition, size of, and risks associated with an investment may differ substantially from any examples set forth in this document. No representation is made that an investment will be profitable or will not incur losses. Where appropriate, changes in the currency exchange rates may affect the value of investments.

Investment involves risks. Past performance is not a guide to future performance. Investors should not only base on this document alone to make investment decision.

This document is issued by Baring Asset Management (Asia) Limited. It has not been reviewed by the Securities and Futures Commission of Hong Kong.

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