James Burns

Equity market volatility has picked up recently, initially on the emergence of DeepSeek’s AI model which challenged the dominance of US mega-cap tech in the AI sector. This has been followed up by concerns over the implications of Donald Trump’s tariffs policies and potential repercussions. We maintain an underweight to the Magnificent Seven within our US exposure as even though share prices have fallen considerably year-to-date, valuations remain demanding. Additionally, influential voices within the administration argue that the US dollar's status as a safe haven and reserve currency has its drawbacks, and that the US could benefit from a weaker dollar.

If the US is no longer perceived as a safe haven and investors shift away from the US dollar as a reserve currency and US Treasuries as risk-free assets, this would be a monumental change. It is a difficult risk to price or trade, but gold remains one of the few assets that could benefit. Diversification remains key and our fixed income portfolio duration provides some buffer to our overweight equity position.

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