The Month in a Minute
📰 Overall: A month that outlined the importance of staying invested, April saw huge, tariff-related swings in market prices, as global shares finished positive.
💪 Relative Performance: All Wealthify Original and Ethical Plans outperformed their benchmark.
🗒️ Plan Summary: In a volatile month, bonds helped protect lower risk Plans, outperforming their higher risk counterparts.
🕰️ Going Forward: April’s bounce back showed the power of positive news headlines on performance. We’re optimistic this momentum will continue, with the changes we’ve made having a positive effect on Plans as we move through 2025 (if economic conditions deteriorate further).
An historic, record-breaking month, as markets bounce back from tariff turbulence.
Even though the final returns might suggest otherwise, April was anything but a normal month for markets — with a look at any chart showing huge swings in prices.
These swings were brought on by President Trump’s ‘Liberation Day’ on April 2nd, which saw him place reciprocal tariffs on over 50 countries.
However, after the initial shock had worn off and a 90-day delay on these tariffs was put in place, markets did what markets do best: bounced back.
The rally that followed the 90-day delay announcement even broke records: the S&P 500 saw its best day since 2008 [1], as US tech enjoyed its second largest day of all-time [2]. Sentiment continued to improve throughout April, as trade negotiations became more likely.
In fact, markets have now erased nearly all losses seen at the beginning of April — serving a timely reminder about the importance of staying invested.
It also reminded us how the up-and-down nature of investing is both normal and necessary for markets to hit new highs.
At the beginning of the year, there was worry surrounding the potential damage an economic shock such as these tariffs could have (especially due to the high valuations of US companies). This was one of the reasons why we positioned your Plans defensively for most of 2024 — a move which has now allowed us to buy into markets like the US at cheaper, more attractive prices.
With some European markets such as the German DAX close to breaking all-time highs again, it may seem as if this tariff turbulence is coming to a close.
However, with the tariffs still under a 90-day delay, caution is still needed.
Investment Plan Performance
April saw all Wealthify Plans outperform their benchmark.
While shares delivered a negative return, bonds did their job by providing protection; this caused lower risk Plans to outperform higher risk ones.
While still ahead of benchmark, their large allocation of US assets did see higher risk Plans produce a negative return. Thankfully, their Japanese, European, and UK mid-cap funds helped recover some of these losses.
Elsewhere, Ethical Plans outperformed Original Plans (with all but Adventurous producing a positive return for the month), as did growth stocks against value stocks.
Investment Plan Performance
The UK 250 was one of April’s strongest performers, finishing up +1.5%. This was due to much of its revenue being less exposed to the tariff turmoil than the FTSE 100, which finished down -1.6%.
US and European markets also finished slightly down for the month, at -1.1% and -2.3%, respectively.
Emerging markets finished relatively flat, despite being supported by strong returns from countries such as Mexico and Brazil. India performed well, which helped lift Asia Pacific markets due to less of a dependency on exports to the US than other parts of Asia.
A common region for investors to turn to when diversifying away from the US, Japanese markets also bounced back to a flat finish.
Summary
With the end of the 90-day tariff delay still ahead, it’s tough to know what’s coming next for the global economy. Through these turbulent times, however, it’s important to avoid short-term thinking because, as April showed, remaining invested to long-term growth.
Our Investment Team continues to actively monitor the financial markets and their impact on Plans — and are always ready to act in your best interest as events unfold. We’re constantly evaluating new market information and key drivers, to help keep your Investment Plan(s) on track.
It’s important to remember that it’s normal for markets to go up and down, with periods of volatility to be expected when you invest.
As always, we continue to look for opportunities to best position your investments, with the goal of protecting your money and achieving your long-term objectives.
With investing, your capital is at risk. Please remember the value of your investments can go down as well as up, and you could get back less than invested.
Wealthify does not provide financial advice. Please seek financial advice if you are unsure about investing.
Your tax treatment will depend on your individual circumstances, and it may be subject to change in the future.
References
1. https://www.investopedia.com/s-and-p-500-has-best-day-since-2008-as-trump-pauses-tariffs-11712412
