New analysis from Asset Risk Consultants shows that private client portfolios are on track to claw back April’s performance but it warns investors that now is not the time to relax.

Private client portfolios were hit by the selloff to equities after US President Donald Trump unveiled sweeping tariffs on 2 April, but recent figures suggest some of the damage has been repaired.

The average return of the ARC Sterling Steady Growth Index (based on the most common risk profile run by discretionary investment managers) for May is estimated to rise by 2.8 per cent resulting in year-to-date performance of -0.4 per cent, according to latest data from UK-based Asset Risk Consultants (ARC).

May saw a continuation of the rebound in equity markets from the April lows with confidence boosted by the announcement of a temporary 90-day reduction in US-China tariffs and better-than-expected earnings announcements from the likes of Nvidia, the firm said in a statement. The result was a gain of almost 6 per cent in global equities when measured in US dollars. Investors with a bias towards growth were back in the ascendency, with global growth stocks outperforming their value counterparts by around 6 percentage points.

“As Benjamin Graham observed more than half a century ago, in the short run the stock market is a voting machine rather than a weighing machine. The recovery in stock markets during May perhaps reflects a re-assessment of the economic damage that the US may cause in aggressively pursuing autarky,” Dan Hurdley, managing director of ARC Research, said. “However, this is not a time for investors to relax, as in the longer-term stock markets behave like weighing machines and the reversal of global liberalisation will inevitably bring slower economic growth, higher budget deficits and lower corporate profitability. Those investors who have until recently enjoyed the benefits of being ‘risk-on’ should probably be considering a move to a ‘risk-neutral’ position for their portfolios. Ignore the recent market tremors at your peril.”

At the start of April, before the impact of the US tariffs was felt, ARC reported that investors were already starting to re-think exposure to US markets.

ARC is an international investment consultancy with offices in the UK and the Channel Islands. It advises on over $25 billion of assets invested across more than 200 banks and investment firms for clients from over 20 jurisdictions around the world. The ARC Indices collect performance of over 350,000 investment portfolios, net of fees, supplied by over 140 investment managers to establish the actual returns being seen by real clients. The research gives ARC an understanding of the drivers of investment performance, which informs its ability to create investment strategies to meet long-term goals and safeguard wealth. Managers include Barclays Wealth, Brewin Dolphin, Investec, Rathbones and UBS.