Irish Life revises down equities position amid tariff related volatilty

Irish Life said client concerns were 'understandable in times like these'

Irish Life now has a 'neutral' position on equities due to tariff risk. Picture: Michael Santiago/Getty

Irish Life has revised down its growth outlook for equities and instead revised up the expected performance of government bonds as stock markets around the world reel from the implementation of US tariffs.

Earlier this month, US president Donald Trump’s tariff announcement caused a severe decline in stock markets around the world, but most notably in the US. Despite Mr Trump reversing course and reducing the tariffs on all countries to 10% for 90 days, with the exception of China, markets continue to remain volatile.

The US is currently levying a 145% tariff on Chinese goods while China has hit US goods with a 125% tariff.

According to the latest update of the Irish Life Investment Managers Outlook, policy developments so far this year have “altered global dynamics with trade tensions likely to keep uncertainty elevated in the coming months”.

On the company’s portfolio positioning, it said it has “made portfolio adjustments in quarter one in light of the changing investment landscape. We entered 2025 overweight equities but trimmed this prior to Trump’s inauguration in January”.

We moved down further to neutral in March given the more aggressive tariff policies than expected and their associated growth risks.

Irish Life added that it now has an “overweight position” in government bonds with a long duration overlay and it is “underweight” on credit, due to the relatively tight spreads at the start of the year and “the vulnerability of these assets into a potential economic slowdown”.

Overweight is a term used to indicate when a certain financial asset or equity, say a stock or a bond, is expected to perform better than the industry benchmark. Underweight is when the expectation is for these assets to underperform.

“In our view, core rates currently offer both an attractive income stream and the potential for capital gains during periods of economic flux or if a downturn occurs forcing central banks to cut rates aggressively,” the company said.

Irish Life said that client concerns are “understandable in times like these” but remaining invested is “important in order to meet long-term goals”.

In the near-term, Irish Life said that the “economic and market outlook is set to remain in a state of flux in the near term as the Trump administration appears intent on disrupting the established order of trade relations.

“This murky policy outlook has created a less predictable backdrop for investors and volatility is likely to remain elevated until there is improved clarity.”