Welcome to Bitesize, our new monthly data-viz series where we unpack market developments in a single chart (or two), giving you sharp insights in under five minutes. This month, we look at the impact of President Trump’s latest tariffs—and how diversification can help investors stay resilient when markets wobble.
On April 2, 2025—a date President Trump proclaimed “Liberation Day”—the administration unveiled the most sweeping tariff hike since the 1930s Smoot-Hawley Tariff Act, a policy widely blamed for deepening the Great Depression. The new measures included a blanket 10 per cent tariff on all imports, alongside further levies for over 60 trading partners. China responded swiftly with a 34 per cent tariff on US goods.
Markets didn’t take it lightly.
US equities tumbled, with technology names like Apple, Nvidia and Tesla leading the decline. Cyclical sectors—such as financials and autos—also sold off.
Tariffs have injected uncertainty into supply chains, corporate earnings and global trade flows. Investors are forced to reprice risk, lower growth expectations, and brace for additional policy shocks—all of which can drive heightened volatility.
On 9 April, President Trump announced the postponement of higher tariffs by 90 days to all regions aside from China. This caused a significant relief rally in stock markets that day, in light of 75 countries reaching out to the US administration for renegotiations. However, the US and China tit-for-tat continues and is still expected to impact global growth and inflation, albeit it is unlikely to feed through meaningfully into the data prints for some months. As it currently stands, markets are still broadly below their YTD peaks by around 10 per cent (looking at S&P 500, FTSE 100 and EURO STOXX 50 for example). This is where the power of diversification comes in.
Equity markets often perform well in stable environments but can reverse quickly when sentiment sours. Multi-asset portfolios, by contrast, spread exposure across asset classes, geographies and sectors—helping to cushion the impact of market shocks and mitigate downside risk when uncertainty strikes.
Take Figure 1, showing year-to-date performance as of the time of writing on April 8. The S&P 500 fell 16.5 per cent—a sharp reversal from earlier gains. But diversified portfolios held up far better: a traditional 60/40 equity-bond mix was down just 7.3 per cent, while a more flexible 60/30/10 strategy (with added exposure to alternative investments and gold) was down only 6.6 per cent.
Figure 1: Year-to-date performance of S&P 500 vs two multi-asset portfolios (per cent)
Source: Aviva Investors, Morningstar. Data as of April 8, 2025.
Note: US equities are represented by the S&P 500 TR Index GBP. The 60 Global Equities–40 Global Bonds portfolio is constructed with a 60 per cent allocation to MSCI ACWI TR GBP and a 40 per cent allocation to the Bloomberg Global Aggregate Hedged to GBP. The 60-30-10 portfolio includes a 10 per cent allocation from Global Bonds into alternatives—split equally between AIMS TR SC2 and a Physical Gold ETC.
The one-year performance tells a similar story (see Figure 2). Looking at one year performance from April 2024 to April 2025, the S&P 500 had been up 20 per cent by February 2025, but had fallen to -3.8 per cent as of April 8. This still fared worse than the 60-30-10 portfolio (up 1.2 per cent) and the 60-40 portfolio (up 0.1 per cent).
Figure 2: 12-month performance of S&P 500 vs two multi-asset portfolios (per cent)
Source: Aviva Investors, Morningstar. Data as of April 8, 2025.
Note: US equities are represented by the S&P 500 TR Index GBP. The 60 Global Equities–40 Global Bonds portfolio is constructed with a 60 per cent allocation to MSCI ACWI TR GBP and a 40 per cent allocation to the Bloomberg Global Aggregate Hedged to GBP. The 60-30-10 portfolio includes a 10 per cent allocation from Global Bonds into alternatives—split equally between AIMS TR SC2 and a Physical Gold ETC.
That difference isn’t just about numbers on a page, it’s about peace of mind during turbulent times. Multi-asset portfolios aren’t designed to dodge risk, but to manage it. They can help reduce drawdowns, smooth volatility, and keep investors focused on long-term goals, even when headlines are anything but calm.
With 2025 shaping up to be a year of policy surprises and geopolitical tension, such resilience could prove valuable. And while investing is a long-term journey, these charts offer a timely reminder: managing volatility matters. For investors approaching a withdrawal, less severe drawdowns reduce the risk of being “locked in” during a market downturn—providing more flexibility, and more confidence, when it’s needed most.
