Trium Capital's Donald Pepper: Tariff tide reveals those swimming uncorrelated

'Conventional diversification no longer provides adequate protection'

clock • 4 min read

We once had taper tantrums; now we have tariff tantrums. US President Donald Trump’s trade war has not just upset the apple cart, it has potentially upended the world economic order.

For global markets, the tide is well and truly out and now we can finally see who is swimming uncorrelated. As the market grapples the tariff-induced volatility, a hard truth is being revealed: many portfolios are more correlated than had been expected, even in the ‘alternatives' realm. Since 2009, traditional investors have relied on assumptions that, broadly, markets will follow predictable, upward trajectories – a view that has only been encouraged by ETF adoption. However, in the current environment of heightened volatility, those assumptions are being rapidly undermined. Ma...

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