Barclays Shifts Strategy Amid Global Economic Risks

Barclays has shifted its investment strategy, favoring fixed income over equities due to risks from U.S. President Trump's tariffs. Despite prior preferences for equities, analysts now see greater danger in the equity market. The economic outlook remains uncertain with potential impacts on growth forecasts.

Barclays announced on Thursday a strategic pivot, indicating a preference for fixed income investments over equities. This marks the first such shift in several quarters, driven by the escalating tariff policies of U.S. President Donald Trump, which pose substantial risks to global economic growth.

Despite past endorsements of global equities, Barclays' analysts expressed concern about the current policy landscape, suggesting that risks now predominantly threaten equities more than fixed income assets. Trump's policies, particularly the recent imposition of a 25% levy on auto imports, have significantly unsettled global markets.

Reflecting on the year's performance, the MSCI All-Country World index has gained a mere 0.55%, while the S&P 500 has dropped nearly 3%. In contrast, 10-year Treasury bonds have seen yields fall, indicating investor caution. Barclays forecasts a noteworthy slowdown in economic growth, noting potential downside if tariff-related challenges persist.

(With inputs from agencies.)