The rapid changes in tariffs under President Trump's administration have led to unpredictable fluctuations in the global market. Experts suggest that focusing on 'diversified dynamic allocation' and 'volatility management' are key strategies for enhancing investment efficiency and safeguarding returns.

Since April 2025, the swift evolution of tariff policies between the U.S. and its major trade partners has resulted in significant market volatility, particularly with the ongoing U.S.-China trade disputes aggravating investor anxiety and increasing inflation pressures. According to Zhang Yuxiang, multi-asset fund manager at Fidelity International, the effective U.S. tariff rate has now reached 24%, comparable to levels during the Great Depression, and is expected to drag GDP growth down by 1.5% to 2.0%, while further weighing on business activity and consumer confidence.

The VIX fear index spiked above 60 earlier in April, a historical high not seen since the 2008 financial crisis and the pandemic in 2020, signaling substantial investor concern about future prospects. While it stabilized slightly afterward, it remained around 30 in mid-April, indicating persistent high-risk sentiment in the market.

In this context, Zhang advises maintaining a diversified asset allocation that adapts dynamically to market changes, while also monitoring volatility management as a crucial component to improve investment efficiency. In terms of asset allocation, he recommends a framework of 'defensive + yield + growth'. Growth assets include high-quality U.S. stocks, core European stocks, and technology stocks related to artificial intelligence, while defensive assets comprise global government bonds, investment-grade debt, and gold mining industries. Yield assets could include dividend-paying stocks, such as European dividend stocks, emerging market bonds, and convertible bonds.

Given the rising uncertainty in the global economy, he emphasizes the importance of maintaining flexibility in regional and industrial allocations, breaking away from the traditional framework that heavily relies on U.S. stocks, and considering cyclical stocks in Europe or countries less affected by the U.S. trade war, like Australia, which has a trade deficit with the U.S. Additionally, investors should seek undervalued investment opportunities in regions like Latin America.

The real key to making investment portfolios more resilient lies in effective volatility management. Historical data shows that portfolios employing volatility control strategies during previous market turmoil, such as the 2020 pandemic, the 2018 U.S.-China trade war, or the 2008 financial crisis, experienced nearly 50% less decline compared to the broader market and around 30% less decline compared to traditional fixed stock-bond allocations.