April was fraught for markets as Trump’s tariff shock rattled risk assets, sending US equities down over 20% before a partial recovery. The dollar weakened, Treasury yields spiked, and global growth forecasts were cut. Equities ended volatile but modestly positive, while bonds gained as investors sought safety. Gold hit a new record high, though property and infrastructure lagged. Umbra MPS models underperformed ARC benchmarks due to sterling strength, but allocations remain in line with global composites, with long-term positioning unchanged.
April brought turmoil as Trump unveiled sweeping tariffs on all major US trading partners, triggering the sharpest sell-off since 2020. US equities fell over 20% at their lows before stabilising after the President backtracked, offering a 90-day pause on new trade measures. The dollar weakened significantly, while 10-year Treasury yields spiked from 4.0% to 4.5%, underscoring concerns over ballooning US deficits and $7 trillion of refinancing needs in 2025.
Global equities finished narrowly positive, with the MSCI ACWI up +0.9%. The S&P 500 ended –0.7%, while the Nasdaq recovered to +0.9% after intraday volatility spiked to its highest since 2008. Growth stocks outperformed value as energy lagged on falling oil prices. European equities slipped –0.4% despite ECB easing and tariff concessions. UK mid- and small-caps gained +2.8% and +3.6% respectively on expectations of Bank of England cuts. Emerging markets were resilient, supported by broad US dollar weakness, with Brazil leading on hopes of rate cuts.
Fixed income markets saw significant swings. The Citigroup World Government Bond Index gained +3.3%, while the Bloomberg Global Aggregate returned +2.9%. US yields ended at 4.1% after hitting 4.5% mid-month. UK gilts rallied on weaker inflation, and EM local currency debt (+2.4%) outperformed hard currency bonds.
Alternatives diverged. Gold surged to a record $3,500 before easing as tariff rhetoric softened. Property (–1.4%) and infrastructure (–2.6%) fell.
For Umbra MPS, April was challenging, with underperformance against ARC benchmarks driven largely by sterling’s +6.5% appreciation versus the US dollar, reducing returns from international fixed income. Umbra models remain closer to global composites (MSCI World / Bloomberg Global Aggregate) and continue to favour higher-yielding international bonds for long-term compounding. Moderate portfolio adjustments included reducing Asian and EM local debt in favour of hedged global aggregate exposure, dampening volatility while preserving yield. Encouragingly, early May has already seen performance recover meaningfully as trade rhetoric eased and new agreements were signalled.
