In the latest Pacific Multi-Asset Solutions Video Update, Freddie Streeter, Head of Global Solutions at Pacific Asset Management, is joined by Pacific’s Chief Investment Officer and Portfolio Manager, Will Bartleet, and Will Thompson, Chief Sustainability Officer and Portfolio Manager. The team discuss the latest market developments, focusing on the impact of US tariff policy shifts, Trump’s fiscal “One Big Beautiful Bill Act,” and resulting economic dynamics. Initially optimistic on equities, the team reduced risk ahead of aggressive tariff announcements in April, then re-added exposure as tariffs were paused and markets rallied.
Video 1: Q2 REVIEW
Rotation from U.S. to Europe
Will and Will comment on Q2 market movements which were dominated by shifting US tariff policies, prompting the team to adjust positioning frequently. Starting the year overweight equities, the team cut risk ahead of unexpectedly harsh April tariff announcements, then re-added exposure after a 90-day tariff pause sparked a strong market rally. While still overweight European value stocks, the team discussed trimming this position and reallocating toward U.S. equities to capture potential rebound and benefit from the long-term AI growth theme.
Video 2: TAKEAWAYS
latest fiscal policies
The team touches on the “One Big Beautiful Bill Act” and its impact combined with the regressive consequences of tariffs, which has seen as worsening inequality and pressuring the lowest-income groups. Alongside expansive fiscal policy, Trump’s attacks on independent institutions including the Fed, universities, and the Bureau of Labor Statistics, are viewed as undermining U.S. asset credibility, posing risks to the dollar, and potentially leading to a more dovish Fed chair who could implement further trade cuts.
Video 3: Opportunities
where are we finding them?
The team discusses key opportunities they are seeing at the moment which include emerging markets, once strong performers in the 2000s, have disappointed over the past 15 years largely due to poor capital allocation that diluted shareholder returns, with China a prime example of GDP growth failing to translate into earnings per share gains.
Video 4: outlook:
for The second half of the year
The outlook for growth and inflation will hinge not only on tariffs but also on the resilience of the US labour market, which has remained surprisingly strong despite recent signs of softening in payroll data. Consumer spending trends will be shaped by this labour strength, while the Fed is maintaining a “wait and see” approach, keeping the option to cut rates later in the year if conditions weaken, with markets pricing in two cuts by year-end.
