Omnis Managed Portfolio Service
May 2025 | Monthly update
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 and new positioning. We completed a full rebalance of OMPS portfolios in late April and transitioned to our latest 2025 Strategic Asset Allocation. This process ensures portfolios remain aligned with our long-term views and current economic expectations.
Tilt towards smaller US companies. We increased our allocation to the Omnis US Smaller Companies Fund while reducing exposure to the Omnis US Equity Leaders Fund. US smaller companies trade on more attractive valuations and may benefit more from any improvement in domestic economic conditions, especially with the market concentrated in mega-cap names.
Adding to Chinese equity exposure. We also added to the Omnis Global Emerging Market Equity Leaders Fund, focusing on opportunities in Chinese equities. Policymakers in China are beginning to support the economy more forcefully, and many companies listed on Chinese markets have limited exposure to the US. This creates scope for recovery, particularly as domestic stimulus measures begin to take effect.
Asset allocation
Take a look at our latest asset allocation in the Omnis Managed Portfolio Service.
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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