Private client portfolios rebounded significantly in the second quarter of 2025, highlighting the benefits of staying invested during market volatility, analysis from Asset Risk Consultants (ARC) has found.
In a robust turnaround against a backdrop of market volatility, ARC’s latest data showed a three per cent increase in the average ARC Sterling Steady Growth Index, setting a year-to-date performance of 1.3 per cent.
[See also: Biggest negative sentiment swing for 15 years as wealth managers reduce US exposure]
Despite a sharp decline in early April, following US President Donald Trump’s tariff announcements, the equity markets rapidly recovered, fuelled by strong earnings from major technology companies.
Related
The Trump administration announced sweeping tariffs on imports in April, dubbed ‘Liberation Day’ by the president. The plan sparked significant volatility across global markets. The market recovery, the report says, demonstrates the efficacy of a steady investment strategy.
Portfolios are now firmly in positive territory for 2025, despite earlier inconsistencies.
Dan Hurdley, managing director, ARC Research, said: ‘Despite a sharp sell-off following Trump’s “Liberation Day” tariff announcements in early April, equity markets staged a strong recovery in Q2, shrugging off both trade and geopolitical concerns. Boosted by strong earnings announcements from “big tech”, US equity markets outperformed and ended the quarter at record highs.’
ARC’s analysis showed that missing the best 90 days within a global equity portfolio over a 24-year period (2001-2024), which equates to just 1 per cent of days missed, would have reduced annualised returns in GBP by 11.7 percentage points.
Content from our partners
[See also: ARC: The company so good their client bought them out]
Hurdley said that the market recovery served as a reminder of the risks involved in trying to time the markets and reinforced the importance of maintaining investments even in periods of volatility.
Hurdley added: ‘One of the difficulties in attempting to actively time markets is the contribution to equity returns that can occur in a single day. Markets tend to go up gradually over the long term, but this trajectory is usually punctuated by some precipitous drops.
‘These often occur during heightened volatility with many of the best days following poor ones.’
This quarter also brought notable volatility in currency markets, with the US dollar weakening against several currencies, approximately 6 per cent against sterling and 11 per cent against the Swiss franc, shifts that had a considerable impact on the performance of the ARC Wealth Indices.
[See also: Choosing the right private client wealth management for you]
Small-cap stocks held their ground, while growth stocks dominated the landscape, contributing significantly to portfolio recoveries, the report noted.
This broad rally indicates a shift in investor sentiment, favouring sectors that exhibit resilience even amid adverse conditions, ARC observed.
