The latest sentiment survey of chief investment officers from UK-based Asset Risk Consultants reveals its biggest negative US sentiment swing for 15 years.

The geopolitical and macroeconomic backdrop shaped by the early months of US President Donald Trump’s return has led many firms to reassess exposure to US assets, according to a new survey by Asset Risk Consultants (ARC).

Sentiment was 4 per cent net negative to US assets compared with 36 per cent net positive a year ago. While the net sentiment towards equities overall remained positive at 29 per cent this has also softened from 40 per cent in the first quarter of last year. Bonds suffered the biggest drop in sentiment; they were down to 29 per cent from 44 per cent net positive a year ago.

The ARC Market Sentiment Survey is a quarterly poll of 78 investment management chief investment officers (CIOs) examining the 12-month outlook for the major asset classes and sectors. It reveals a cautious tone, with conviction levels declining across all major asset classes – particularly with the US.

The investment consultancy highlights that while many investment firms made no changes, those that did primarily reduced US equity exposure, particularly in large caps and technology stocks. Some increased exposure to US small and mid-caps, while some used call options on the S&P 500, suggesting a targeted rather than a broad bullish outlook. Firms reducing their exposure actively hedged dollar exposure and reduced equity allocations, reflecting a defensive strategy amid market uncertainty.  

This week, Vincent Mortier, group CIO of European asset manager Amundi, also highlighted that the focus on equities is moving away from the US towards Europe and Asia. 

“This is the biggest negative sentiment quarter-on-quarter US swing we have seen since our Market Sentiment survey began in 2010,” James Cooke, deputy CIO at ARC, said. “President Trump’s Liberation Day tariffs threaten to damage sentiment further. Higher asset price volatility ought to provide opportunities for active managers to demonstrate the value they can provide. Those managers not making changes indicate they intend to look through the Trump-induced volatility believing tariff imposition may be temporary.”

Asset Risk Consultants is an international investment consultancy with offices in the UK and the Channel Islands. ARC advises on over $22 billion of assets invested across more than 200 banks and investment firms for clients from over 20 jurisdictions around the world. 

The ARC Indices collect the actual performance of over 350,000 investment portfolios, net of fees, supplied by over 140 investment managers to establish the actual returns being seen by real clients. The research gives ARC an understanding of the drivers of investment performance, which informs its ability to create investment strategies to meet long-term goals and safeguard wealth. Striving for persistent investment performance is at the heart of the business. Managers include Barclays Wealth, Brewin Dolphin, Investec, Rathbones and UBS. 

ARC, which is owned by its management and staff, says it nurtures a culture of independent thinking. It is not tied to, nor is it affiliated with any investment management business. Its consultants provide advice and counsel to individuals, their families and trusted advisors. ARC’s problem-solving approach ensures peace of mind based on sound facts and good judgment.

Separately, US President Donald Trump unveiled sweeping tariff measures against a host of countries yesterday, including those in the European Union, Asia and the Indian sub-continent. Trading partners face a 10 per cent tariff or higher. US stock-index futures fell in after-hours trading on Wednesday.