Omnis Agility update: May 2025
Market-moving events
Tariffs return to centre stage.
Tariff tensions intensified in April as President Trump announced a new wave of duties on Chinese imports, pushing the average tariff level to around 110%. The EU retaliated with tariffs on €26 billion of US goods, while China raised duties on select US imports to 125%. Markets were rattled by the renewed uncertainty.
Markets bounce on hopes of talks.
Equity markets sold off sharply early in the month but rallied after the US paused most tariff increases for 90 days and reports suggested negotiations with China had resumed. Still, US GDP in Q1 2025 turned negative, dragged down by frontloaded imports and weak personal consumption – the slowest since Q2 2023.
Growth outlook weakens, bonds disappoint.
Surveys point to sluggish global growth in the second quarter of the year. As a result, investors are pricing in more rate cuts across developed markets. Credit spreads widened during April, but government bonds offered little of their usual protection, challenging traditional portfolio diversification.
Investment highlights
Portfolio rebalance with added ETF exposure.
We rebalanced all Agility portfolios in late April and introduced two new ETFs to reflect our latest tactical asset allocation views. These changes help ensure the portfolios remain diversified, responsive to market shifts and positioned to capture opportunities as they emerge across global markets.
Targeting US smaller companies.
We increased exposure to US smaller companies by adding the SPDR Russell 2000 US Small Cap UCITS ETF. Valuations remain attractive relative to large caps, and smaller firms may benefit more from any improvement in the US economy. With investor focus still skewed toward mega-cap stocks, we see room for rotation into smaller names.
Increasing allocation to China.
We also added the iShares MSCI China A UCITS ETF to capture opportunities in Chinese equities. Policymakers are stepping up support for growth, and many domestically focused companies are less exposed to US trade tensions. We believe this part of the market offers selective value and potential upside as stimulus measures begin to take hold.
Issued by Omnis Investments, which is authorised and regulated by the Financial Conduct Authority. Registered address: Auckland House, Lydiard Fields, Swindon SN5 8UB. This update reflects our view at the time of writing and is subject to change. The document is for informational purposes only and is not investment advice. We recommend you discuss any investment decisions with your financial adviser. Omnis Investments is unable to provide investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given. Past performance should not be considered as a guide to future performance. Approved by Omnis Investments on 1 May 2025.
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