Colin & Cie's positioning in the context of an impending trade war
The introduction of massive import tariffs by the new US administration against most countries in the world has caused turbulence in the financial markets. The risk of a global trade war with negative effects on the economy and inflation led to historically sharp losses in equities. During such times, keeping a cool head, controlling your fears and avoiding irrational decisions is difficult for many investors. Read on to find out how Colin&Cie is positioning itself in the current environment.
Investment process
With its core competence in discretionary asset management, Colin&Cie takes responsibility for the entire investment process. This is characterised by a clear structure and the achievement of the client's investment objectives with the highest possible probability and the lowest possible risk. Colin&Cie invests for the long term, adheres rigorously to the investment strategy chosen by the client and bases its investment decisions on its own independent research.
For any financial market developments, we begin with a comprehensive analysis of over 250 leading indicators. The resulting assessments provide us with indications of necessary adjustments in the allocation of the asset classes.
By taking bonds, equities and alternative investments such as gold and private equity into consideration, a portfolio can better spread risk, reduce volatility and increase the likelihood of achieving objectives in the long term. Please find below our views on the performance of asset classes at Colin&Cie in the year to date 2025 and our recent adjustments.
Bonds
In the current environment, the strategic focus on bonds with low interest rate risk has proven successful. In March 2025 in particular, we took advantage of opportunities for rising interest rates in Europe by adding longer maturities. We anticipated the risk of a widening spread at an early stage and further increased the proportion of high-quality investments. As a result, all bond strategies have seen a slight improvement in annual performance.
European bond market by maturity and credit quality
The higher the remaining time to maturity and the lower the credit rating, the higher the yield.
x-axis: remaining time to maturity in years; y-axis: yield in % p.a.
Source: LSEG Datastream, Colin&Cie
Equities
In equities, we have deliberately reduced the allocation since May 2024 based on our indicators. The tactical underweight has proven effective in the current environment. We have repeatedly pointed out existing risks, particularly those arising from the concentration in the US technology sector. U.S. equities are currently experiencing the sharpest decline globally. However, the deterioration in investor sentiment, the unwinding of excessive trend deviations and more attractive valuations are having a supportive effect. Despite a persistently high-risk environment, equities have become more attractive again after the historically sharp price decline at the beginning of April.
Investor sentiment in the USA
The current downturn in investor sentiment serves as a counter-indicator and is therefore viewed positively.
Source: LSEG Datastream, Colin&Cie
Alternative investments
Alternative investments were the best-performing asset class in the first quarter of 2025, once again demonstrating their importance as a portfolio stabiliser and return enhancer. The performance of the underlying investments was generally good to very good for the current reporting period.
Adjustments based on the current situation
We are maintaining our underweight position in equities but have modestly increased our allocation following the strong correction. The geographic distribution remains neutral. Due to the ongoing uncertainty in the financial markets, we have also slightly increased the exposure to gold. Both increases lead to a slight reduction in bonds.
The impact of the new trade tariffs on the economy and inflation is still unclear at present. The current indicators only cover this environment to a limited extent, which means that the informative value should be interpreted with caution. To identify possible effects of the trade tariffs as quickly as possible, we will significantly increase the frequency with which we evaluate the leading indicators. This will enable us to react quickly and further adjust our positioning if necessary.
Disclaimer - legal notice
This publication was produced by the Investment Office of the Colin&Cie Group. The information and opinions contained in this document are based on sources we believe to be reliable. However, we cannot guarantee the reliability, completeness or correctness of these sources. All information and quoted rates are only up-to-date at the time of this publication and are subject to change at any time without notice. The content is based on numerous assumptions made by the Colin & Cie Group. It should be noted that different assumptions can lead to materially different results. The forecasts and assessments are only current at the time this publication is prepared and can change at any time without prior notice. Past performance of an investment is not a guarantee of future results. Certain investments can experience sudden and substantial losses in value. This information and views do not constitute a solicitation, offer or recommendation to buy or sell investment instruments or to carry out any other transactions. We recommend interested investors to consult their personal advisor before making decisions on the basis of this document so that personal investment goals, financial situation, individual needs and risk profile as well as further information can be duly taken into account as part of a comprehensive consultation. The information contained in this publication is marketing material that is distributed for advertising purposes only.
