Many fund houses mark Liberation Day—the day president Trump announced sharply higher US trade tariffs—as the standout moment of 2025, according to the Investment Officer Outlook Survey 2026. But what surprised asset managers even more was how quickly markets carried on in the months that followed, as if nothing had happened.
The Investment Officer survey asked 28 asset managers how they look back on the past year and what they expect for 2026.
When it comes to the most dramatic moment of 2025, strategists did not have to think long. On the trading day after Liberation Day, the S&P500 lost nearly 5 percent and the technology index Nasdaq around 6 percent. Investors shuddered at the prospect that Trump’s tariffs could ignite a global trade war. Although the protectionist stance of the US president was hardly a secret, many were still taken aback when he acted on his rhetoric.
“The market of course knew about the risk of a sharp increase in tariffs under Trump,” recalled Paul Diggle, chief economist at Aberdeen. “But early in the start of his second term, a narrative emerged that we would see a very market-friendly and growth-friendly set of policy measures. That is why the scale of the tariff announcements on Liberation Day came as a huge volatility shock for markets.”
“At first, some were skeptical that Donald Trump would actually follow through with broad-based tariff hikes. The reality of implementation contributed to the significant market sell-off around Liberation Day,” added Robert Griffiths, equity strategist at L&G.
Biggest surprise of 2025*
*28 assetmanagers on what they consider the biggest surprise of the financial year 2025
A market without fear
Ten of the 28 surveyed fund houses cite Liberation Day as the surprise of the past financial year. Eleven others say they were even more astonished by what happened next: remarkably resilient financial markets. The VIX volatility index, also known as Wall Street’s “fear gauge,” reached its highest peak since the outbreak of the coronavirus crisis in early april, but in the months that followed, nervousness dissipated entirely and the VIX drifted calmly around reassuringly low levels.
“The fear of tariffs has not had the negative economic and market impact many feared. After the market turmoil directly after 2 april, risk markets have recovered and economic activity remains resilient,” said Guillermo Felices, strategist at PGIM.
“The striking feature of this year is the market’s ability to adapt quickly and show resilience,” said Romain Aumond, strategist at Natixis. “Expectations are now based on structural trends rather than sentiment.”
But Salman Ahmed, his fellow strategist at Fidelity, argued that markets are instead ignoring some negative structural trends. “The biggest surprise in 2025 was the unexpected strength of the short-term environment for risk assets, despite the fact that several deeper structural risks have increased faster than anticipated, amplified by US government policy.”
AI boost
Several fund houses believe that positive developments among US Big Tech helped offset the negative impact of the tariffs.
“Despite the widespread uncertainty about how these tariffs would ripple through the economy and complicate the path toward monetary policy normalisation, the US showed an ability to absorb shocks without derailing growth,” noted Anwiti Bahuguna, co-chief investment officer at Northern Trust AM.
“Strikingly, the technology sector emerged as an outlier: not only did it withstand turbulence, it consistently delivered positive surprises in earnings and innovation. This resilience was supported by strong corporate balance sheets, agile supply chains, and a persistent appetite for technological investment, which helped offset the impact of higher import costs and uncertainty in other parts of the economy.”
Griffiths of L&G added: “Growth has been supported by the AI investment wave, so perhaps it is partly a matter of luck. Even so, the limited negative impact of the tariffs helped equity markets rise in the second half of the year.”
Investment Officer Outlook Survey 2026
This article is part of a series of five and is based on a survey that Investment Officer sent in November to asset managers operating in Europe. The findings are based on written responses from strategists and investors at Aberdeen, Aegon Asset Management, Amundi, Blackrock, Capital Group, Cardano, Carmignac, Columbia Threadneedle Investments, Comgest, DWS, Fidelity International, Goldman Sachs Asset Management, Invesco, JP Morgan Asset Management, Legal & General Investment Management, M&G Investments, MFS Investment Management, Natixis Investment Managers, Northern Trust Asset Management, Nuveen, PGIM Fixed Income, Pictet Asset Management, RBC Bluebay, Robeco, Schroders, Triodos Investment Management, Van Lanschot Kempen and Vanguard. Together these asset managers oversee an estimated 54,000 billion dollar globally, just over 40 percent of the market.