The majority of financial advisers are recommending clients maintain or increase their allocations to US equities despite the recent market volatility, according to a Franklin Templeton survey.
The survey, conducted by Opinium, found 50% of advisers have been advising their clients to maintain their positions while 14% have recommended clients increase their allocations to US equities, suggesting advisers remain confident in the long-term potential of US equities.
Current allocations to US equities in client portfolios sit at 10%-25% for 45% of advisers, while 36% of advisers said they are allocating more than 25% to US equities.
However, the survey found the effect of the ‘Liberation Day’ tariffs on markets has influenced how advisers have approached their clients’ asset allocation, with 60% changing their strategies.
Among these, 16% have increased their global asset allocations to actively managed strategies, and a further 15% have increased their allocation to alternative assets as a hedge against volatility. In addition, 10% have either moved assets into defensive or lower-risk holdings or have rebalanced portfolios to reduce exposure to tariff-affected sectors.
Michael Browne, global investment strategist at Franklin Templeton Institute, said: “While tariffs may have shifted trade dynamics, the strength of the US economy and its global influence remain intact. The volatility from the new tariffs has created some short-term noise, but markets knew this was coming and have largely priced this in.
“The majority of advisers we surveyed are looking beyond the volatility, encouraging their clients to hold or increase their position in US stocks. History shows us that the US often absorbs trade shocks and recovers quickly, thanks to its fundamental structural growth, continuous innovation, and strong corporate earnings.”
