Donald Trump’s punishing tariff salvos and frequent flip-flops are laying down a challenge to Asian fund managers: how to avoid any potential wipe-outs in a headline-driven market.
The US president’s plethora of announcements in his first three weeks in office, targeting nations as diverse as Canada, Mexico and China, have whipsawed financial assets from Treasuries to oil and Bitcoin. They’ve also made selecting investments based on long-term fundamentals something of a fool’s errand.
Asian investors are responding to the volatility by seeking out assets offering relative protection from the swelling global trade frictions. Among these are DeepSeek-themed “hidden gems” in China, high-yielding stocks in Singapore and Australia, countries with upsized domestic markets, and India’s government bonds.
“Our playbook for Trump 2.0 was to buckle up for higher volatility, so investors should take less gross risk now than in 2024,” said Louis Luo, head of multi-asset investment solutions for Greater China at abrdn plc in Hong Kong. The infinite loop of “escalation, retaliation, negotiation and de-escalation,” will create a lot of noise and volatility, he said.
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