Mounting trade tensions and tariffs have become the single biggest worry for global investors, overshadowing all other economic risks, a new survey shows.
Nearly two-thirds (63%) of institutional investors and wealth managers identified trade levies as the most significant macroeconomic concern impacting their strategy, according to a survey published by British investment manager Schroders.
The perceived risk from tariffs was more than six times greater than the next highest-ranking concern.
The poll, which surveyed nearly 1,000 top investors representing a combined $67 trillion in assets, found that this trade uncertainty is fueling a demand for stability.
The study was done between April and May, and ahead of the announcement of the trade deal that U.S. President Donald Trump said was reached with China. The agreement struck on Wednesday is subject to final approval by Trump and Chinese President Xi Jinping, the White House leader said.
Meanwhile, the Schroders survey indicated that about four in five investment professionals polled also said they are likely to increase their allocation to actively managed investments in the coming year, in a bid to stem the volatility caused by macroeconomic events.
“Resilience now tops the investment agenda, as the rising tide no longer lifts all boats,” said Johanna Kyrklund, group chief investment officer at Schroders. “The wider backdrop is that financial markets are still adjusting back to structurally higher interest rates, made painful in many cases by high levels of debt. This is raising questions about future market trends and the value of passive approaches in a period of greater uncertainty.”
Kyrklund added, “In this environment, active strategies provide the control investors need to manage complexity, create portfolio resilience and seize opportunities.”