How to protect your portfolio from ‘Liberation Day’ tariffs

Today is set to see a deluge of tariffs imposed on US imports, with Donald Trump’s ‘Liberation Day’ set to take a wrecking ball to the established order of international trade.

As tariff day arrives, you’ll want to know how best to protect your savings and investments from the impact of a global fallout. That’s easier said than done, and many experts might say it’s better to take a long term approach than to try to navigate what’s certain to be a hugely turbulent period too actively.

However, there are a few top stocks, funds and trusts that experts think could offer some respite from the worst impacts.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

In light of the tariff uncertainty, “investors need to engage with their portfolios a little more to make sure they are not caught out”, says Darius McDermott, managing director of Chelsea Financial Services. “In this complex macroeconomic backdrop, long-term, thematic investing, combined with safe haven assets, can allow investors to capture the upside without suffering too much of the downside,” he adds.

Experts think tariffs could lead to an increase in global inflation, which would see interest rates (and related metrics like mortgage rates) rise.

Stock markets have already been hit: the S&P 500 fell 4.6% during Q1 2025, ending a five-quarter winning streak, with the decline largely driven by investors’ concerns over the impact of tariffs. The stock selloff may well have been driven by moves by investors to hedge their portfolios against tariffs and their impacts.

Read on for experts’ views on how best to build some protection against tariffs in your portfolio.

Tariff hedges: consider risks and long-term objectives

By and large, a lot of experts recommend sticking to core investing principles in the face of the short term volatility that tariff day is likely to instigate.

“For financial planning clients, tariffs, albeit these are extreme, should not be seen as a unique or insurmountable problem,” Finn Houlihan, chartered financial planner and managing director at AAF Financial, tells MoneyWeek. “Investment plans can be diversified enough to help protect clients from market volatility stemming from tariffs."

“One should remain invested and allocate according to the strategic asset allocation that best suits the end investor risk appetite, drawdown and tolerance for loss,” says Raymond Backreedy, chief investment officer at Sparrows Capital. “We emphasise a globally diversified multi asset portfolio, where the main return/risk drivers are from listed equities and defensive assets are from high quality global sovereign short- to mid-duration bonds.”

Funds and trusts to protect your portfolio from tariffs

While diversification and a long-term mindset are key, there are some tactical plays that might be worth considering.

Europe and the UK

McDermott, for example, recommends looking at European or British funds for value.

“Despite the usual chorus of US-centric pessimists decrying the lack of verve in the European economy, innovation is booming and a number of funds are harnessing this trend,” he says. He suggests the Liontrust European Dynamic fund as a means to access “resilient, high-growth businesses”.

He adds that funds like VT Downing Unique Opportunities and Schroder British Opportunities are well-placed to uncovering hidden Britain’s small- and mid-cap “hidden gems.

“For all the doom-mongering about the UK economy, there could be a real opportunity for re-rating, if you know where to look,” says McDermott.

Alex Watts, senior investment analyst at Interactive Investor, favours Fidelity Special Values Trust for its “all of market approach to finding out-of-favour UK equities”, and the JPM UK Equity Core Fund as “a core option for gaining active exposure to UK equities”.

Global diversification

The only constant around Trump’s tariff regime is uncertainty, so it is a good idea to ensure that your portfolio has as much diversification as possible.

That applies between asset classes, but within equities, it also applies to geographies.

McDermott highlights Morgan Stanley Global Brands as a source of global exposure.

The fund, he says, “provides exposure to world-class companies with serious pricing power – the kind of companies that weather storms and keep customers coming back, recession or not”.

Defensive assets (bonds and gold)

“With Trump the ringmaster of daily volatility, investors will need some ballast in their portfolios, and bonds can do just that,” says McDermott. “For example, Invesco Bond Income Plus delivers steady income streams while insulating against wild market swings.”

Gold prices have surged amidst the unpredictability thanks to the yellow metal’s history as a safe-haven asset.

“Gold is still hovering near record levels after a glittering run upwards, as investors seek out safer havens for their money,” says Susannah Streeter, head of money and markets, Hargreaves Lansdown.

There are various ways to invest in gold, including buying a gold ETF.

Alternatively, McDermott picks out the Jupiter Gold & Silver fund for exposure to both gold and silver.