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What’s changed since early April?
At the start of April, markets were reeling from the announcement of Trump’s reciprocal tariffs and uncertainty was at its peak. Tariffs had been announced without clear negotiation outcomes, rattling markets. Since then, while final deals are still in flux, the worst-case scenarios now seem less likely. Most countries, except China, have been granted a 90-day pause, and the expectation is that tariff levels will eventually be scaled back from their initially proposed highs – albeit there’s likely to be a residual level of tariffs for most. Encouragingly, comments from senior US advisors, alongside the assurance that Federal Reserve Chair Jerome Powell will stay in place, have helped steady some nerves.
Staying flexible amid a changing landscape
It’s important to remain flexible during periods of high uncertainty rather than trying to predict a single outcome. The Pie investment team is preparing portfolios for a range of possibilities and our focus remains on the things within our control – deeply understanding the fundamentals and values of the businesses that we own. Defensive exposure has been increased — including raising cash levels and adding to gold exposures in certain funds — while maintaining enough growth exposure to benefit from any market rallies.
While markets have recently rebounded on optimism around negotiations and potential tax cuts, it is unlikely to be smooth sailing from here. Trump has shown a tendency to pivot when market pressure intensifies, particularly when bond yields rise and equity markets fall sharply. There’s now a clearer sense of Trump’s ‘pain points’ that might trigger further policy shifts.
Looking ahead: risks, opportunities and volatility
It seems probable that tariffs will settle well above pre-crisis levels — perhaps around 15% compared to the 3–4% baseline seen before. That’s still a material shift, with consequences for corporate sentiment, growth, and investment decisions. Investors should expect ongoing market swings — sharp rallies on positive headlines, followed by pullbacks when news turns negative.
Still, opportunities are emerging. Trump’s administration is also hinting at further corporate tax cuts and other stimulus measures, which, if passed, could provide meaningful support for earnings and market sentiment.
The key takeaway? While the coming months are likely to remain bumpy, history reminds us that markets have a strong track record of recovery over the longer term. Staying flexible, focusing on quality businesses, and not reacting to daily headlines remain critical strategies for navigating uncertainty.
If you have any questions, please feel free to reach out to the team.
Information is current as at 28 April 2025. Pie Funds Management Limited (“Pie Funds”) is the issuer and manager of the funds in the Pie Funds Management Scheme and the Pie KiwiSaver Scheme (“Schemes”), the product disclosure statements of which can be found at www.piefunds.co.nz. Any advice is given by Pie Funds and is general only. Our advice relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees, like brokerage, if you act on any advice. As manager of the Schemes, we receive fees determined by your balance and we benefit financially if you invest in our products. We manage this conflict of interest via an internal compliance framework designed to help us meet our duties to you. For information about how we can help you, our duties and complaint process and how disputes can be resolved, or to see our disclosure statement, please visit www.piefunds.co.nz. Please let us know if you would like a hard copy of this disclosure information. Past performance is not a guarantee of future returns. Returns can be negative as well as positive and returns over different periods may vary. The information is given in good faith and has been derived from sources believed to be reliable and accurate. However, neither Pie Funds nor any of its employees or directors gives any warranty of reliability or accuracy and shall not be liable for errors or omissions herein, or any loss or damage sustained by any person relying on such information, whatever the cause of loss or damage. No person, including the directors of Pie Funds, guarantees the repayment of units in the Schemes or any returns of units in the Schemes.