The age of uncertainty

On 8 April 2025, the Vix closed at 52, the third-highest level in since its inception in 1990. This was not as high as the GFC or COVID but was still a significant spike. It was caused by fears of a looming trade war. On 2 April 2025 (“Liberation Day”) tariffs were announced by the US against most of the world. For example, a 20% tariff was announced on imports from the European Union. A tariff against China was subsequently hiked from 34% to 125%. The White House quickly seems to have had a change of heart. On 9 April 2025, tariffs were reduced to 10% against most countries but remained at 33% for China and 25% for Mexico and Canada. These remain high levels, enough to significantly dampen world trade.

Whereas the GFC was caused by systemic failure in the financial system, and COVID a medical disaster, Tariff Turmoil was a political event — a self-inflicted shock. Investors in emerging markets are accustomed to factoring in political uncertainty before deciding whether to invest in a country’s bonds or equities. Today, investors in US assets must also study political risk more carefully. US policy has become a source of investor uncertainty.

The effect of US tariff policy on the volatility (measured on a 10-day rolling basis) of various international equity markets is illustrated in the animation below.

Stock market volatility and US tariffs in 2025

The US dollar has also come under pressure in 2025. The US dollar index has fallen about 8% year-to-date. With US debt at $37 trillion, and interest payments exceeding $1 trillion per annum, the risk of US insolvency must at least be considered as a future possibility. The Department of Government Efficiency (DOGE) has undershot promises of the level of savings it would be able to achieve, and Elon Musk, who was running it, has left. Meanwhile, the One Big Beautiful Bill is forecast to add several trillion dollars to the national debt of the United States over the next decade¹. 

Investor uncertainty

How have investors been responding? They have sought diversification from US assets. As can be seen in the chart below, US equities have underperformed so far in 2025.

US equities underperform YTD

The underperformance of US equities this year is against the long-term trend. As shown in the monthly data chart below, over a twenty-year period, US equities have risen from a 51% allocation of the MSCI ACWI to 64% (slipping from 67% at the end of November 2024). Many investors may be regretting having been overweight US equities during the first five months of 2025. 

Long-term drift to US equities in MSCI ACWI 

The importance of diversification

In uncertain times, it is important for investors to be well diversified. Blending traditional long-only equities with traditional long-only bonds in a portfolio is no longer enough, in our view. Investors should consider increasing diversification by including alternative assets such as gold and silver, absolute return bond strategies, and market neutral equity.

Gold remains the ultimate safe-haven asset—durable, liquid, and arguably the true form of money. In times of market stress, it can serve as both a store of value and a powerful portfolio diversifier, especially when combined with silver and mining equities.

An absolute return approach to fixed income can also deliver diversification. By managing risk through disciplined portfolio construction and a defined risk budget, this strategy aims to generate positive returns with lower volatility than traditional fixed income or equity markets.

A market neutral equity strategy targets alpha, not market direction. By balancing long and short positions, returns are sought that are uncorrelated with market moves—offering potential resilience in both rising and falling environments.

Together, gold, absolute return fixed income, and market-neutral equities offer a compelling toolkit for investors seeking true diversification—especially when uncertainty looms. Don’t keep all your eggs in one basket.

Sources

¹Garrett Watson, et al, 23 May 2025, “Big Beautiful Bill” House GOP Tax Plan: Preliminary Details and Analysis. Available at https://taxfoundation.org/research/all/federal/big-beautiful-bill-house-gop-tax-plan/

Jupiter Merian Global Equity Absolute Return strategy risks

• Investment risk - whilst the Fund aims to deliver above zero performance irrespective of market conditions, there can be no guarantee this aim will be achieved. Furthermore the Fund may exceed its volatility limit. A capital loss of some or all of the amount invested may occur. 
• Company shares (i.e. equities) risk - the value of Company shares (i.e. equities) and similar investments may go down as well as up in response to the performance of individual companies and can be affected by daily stock market movements and general market conditions. Other influential factors include political, economic news, company earnings and significant corporate events.
• Currency risk - the Fund can be exposed to different currencies and may use techniques to try to reduce the effects of changes in the exchange rate between the currency of the underlying investments and the base currency of the Fund. These techniques may not eliminate all the currency risk. The value of your shares may rise and fall as a result of exchange rate movements.
• Stock connect risk - the Fund may invest in China A-Shares through the China-Hong Kong Stock Connect (“Stock Connect”). Stock Connect is governed by regulations which are untested and subject to change. Trading limitations and restrictions on foreign ownership may constrain the Fund’s ability to pursue its investment strategy.
• Derivative risk - the Fund uses derivatives to generate returns and/or to reduce costs and the overall risk of the Fund. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment. Derivatives also involve counterparty risk where the institutions acting as counterparty to derivatives may not meet their contractual obligations.

For a more detailed explanation of risks, please refer to the "Risk Factors" section of the prospectus. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall. Your attention is drawn to the stated investment policy which is set out in the Fund’s prospectus.

Jupiter Strategic Absolute Return Bond strategy risks

• Investment risk - while the Fund aims to deliver above zero performance irrespective of market conditions, there can be no guarantee this aim will be achieved. Furthermore the actual volatility of the Fund may be above or below the expected range, and may also exceed its maximum expected volatility. A capital loss of some or all of the amount invested may occur.
• Emerging markets risk - less developed countries may face more political, economic or structural challenges than developed countries.
• Credit risk - the issuer of a bond or a similar investment within the Fund may not pay income or repay capital to the Fund when due. Bonds which are rated below investment grade are considered to have a higher risk exposure with respect to meeting their payment obligations.
• CoCos and other investments with loss absorbing features – the Fund may hold investments with loss-absorbing features, including up to 20% in contingent convertible bonds (CoCos). These investments may be subject to regulatory intervention and/or specific trigger events relating to regulatory capital levels falling to a pre-specified point. This is a different risk to traditional bonds and may result in their conversion to company shares, or a partial or total loss of value.
• Bond Connect Risk - The rules of the Bond Connect scheme may not always permit the Fund to sell its assets, and may cause the Fund to suffer losses on an investment. Interest rate risk - investments in bonds are affected by interest rates and inflation trends which may affect the value of the Fund.
• Liquidity risk - some investments may become hard to value or sell at a desired time and price. In extreme circumstances this may affect the Fund’s ability to meet redemption requests upon demand.
• Currency risk - the Fund can be exposed to different currencies. The value of your shares may rise and fall as a result of exchange rate movements. Derivative risk - the Fund uses derivatives to generate returns and/or to reduce costs and the overall risk of the Fund. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment. Derivatives also involve counterparty risk where the institutions acting as counterparty to derivatives may not meet their contractual obligations.

For a more detailed explanation of risks, please refer to the "Risk Factors" section of the prospectus. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall. Your attention is drawn to the stated investment policy which is set out in the Fund’s prospectus. The Fund may be more than 35% invested in Government and public securities. These can be issued by other countries and Governments.

Jupiter Gold & Silver strategy risks

• Investment risk - there is no guarantee that the Fund will achieve its objective. A capital loss of some or all of the amount invested may occur.
• Sector concentration risk - the Fund's investments are concentrated in natural resource companies, and may be subject to a greater degree of risk and volatility than a fund following a more diversified strategy. Silver tends to outperform gold in a rising gold price environment and it tends to underperform gold when sentiment moves against the sector.
• Strategy risk - as the Fund invests in other collective investment schemes, which themselves invest in assets such as bonds, company shares, cash and currencies, it will be subject to the collective risks of these other funds.This may include emerging markets risk and smaller companies risk.
• Company shares (i.e. equities) risk - the value of Company shares (i.e. equities) and similar investments may go down as well as up in response to the performance of individual companies and can be affected by daily stock market movements and general market conditions. Other influential factors include political, economic news, company earnings and significant corporate events.
• Concentration risk (number of investments) - the Fund may at times hold a smaller number of investments, and therefore a fall in the value of a single investment may have a greater impact on the Fund’s value than if it held a larger number of investments. Smaller companies risk - smaller companies are subject to greater risk and reward potential. Investments may be volatile or difficult to buy or sell. Liquidity risk - some investments may become hard to value or sell at a desired time and price. In extreme circumstances this may affect the Fund’s ability to meet redemption requests upon demand.
• Currency risk - the Fund can be exposed to different currencies. The value of your shares may rise and fall as a result of exchange rate movements.
• Derivative risk - the Fund may use derivatives to generate returns as well as to reduce costs and/or the overall risk of the Fund. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment. Derivatives also involve counterparty risk where the institutions acting as counterparty to derivatives may not meet their contractual obligations. 

For a more detailed explanation of risks, please refer to the "Risk Factors" section of the prospectus. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall. Your attention is drawn to the stated investment policy which is set out in the Fund’s prospectus. The net asset value of the Fund may have high volatility due to the nature of the asset class invested.

Important information

This marketing document is intended for investment professionals* and is not for the use or benefit of other persons. This document is for informational purposes only and is not investment advice. Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested. The views expressed are those of the individuals mentioned at the time of writing, are not necessarily those of Jupiter as a whole, and may be subject to change. This is particularly true during periods of rapidly changing market circumstances. Every effort is made to ensure the accuracy of the information, but no assurance or warranties are given. Issued in the UK by Jupiter Asset Management Limited (JAM), registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ is authorised and regulated by the Financial Conduct Authority. Issued in the EU by Jupiter Asset Management International S.A. (JAMI), registered address: 5, Rue Heienhaff, Senningerberg L-1736, Luxembourg which is authorised and regulated by the Commission de Surveillance du Secteur Financier. No part of this document may be reproduced in any manner without the prior permission of JAM/JAMI.

*In Singapore, investment professionals means accredited and/or institutional investors as defined under section 4A of the securities and futures act ("SFA").

FOR INVESTORS IN SINGAPORE

Please note that Jupiter Merian Global Equity Absolute Return Fund, Jupiter Gold and Silver Fund and Jupiter Strategic Absolute Return Bond Fund have been entered into the List of Restricted Schemes by Monetary Authority of Singapore) as defined in regulation 2 of the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005) under paragraph 3 or 4 of the Sixth Schedule of the Regulations. This document has not been registered as a prospectus with the Monetary Authority of Singapore pursuant to the exemptions under Sections 304 and 305 of the SFA. This document has not been reviewed by the Monetary Authority of Singapore.