Mar ’25: Anticipating tariffs

Posted on by FIRE v London

What’s in the news?

Talking about the news in March, given what’s been happing on the tariff front over the last few weeks, seems a bit pointless.

We entered March with a lot of drama about Ukraine, and some notable ‘ceasefire’ activity on the diplomatic front.

We finished March waiting for ‘liberation day’, April 2nd, when Trump unleashed a basically bonkers cocktail of tariffs on every country in the world – except Russia, of course.

What’s going on with me?

In the meantime, life goes on.

I attended a funeral of a long time friend and neighbour in north London.

I visited a rather bizarre concert in the Royal Festival Hall.

And I visited hospital for my first MRI scan, participating in a clinical research programme at University College London Hospital. I was impressed, I have to say, and grateful that I live within relatively easy reach of this excellent hospital.

I also visited Dorset – Studland to be precise – and went yomping up to Old Harry Rocks, the start of the Jurassic Coast. It’s a beautiful part of the world, and less than 3 hours from London Waterloo.

Markets in March

My markets’ movements in March 2025

Markets generally drooped in March, particularly the US’s S&P500. Enthusiasm/animal spirits from Trump’s election win are being replaced by trepidation / concern about Trump not being good for the US economy after all. The dollar, and the AUD, fell against the pound.

My portfolio in March

My weighted benchmark fell almost 4% on a constant currency basis; my overseas currencies fell 1.3%, so my benchmark dropped over 5%. Against that I fell ‘only’ 3.8% which, considering my leverage, is surprisingly modest.

.I was quite active with my portfolio in March.

I have been buying on the dips. Google, Microsoft, Adyen and Wise all are being topped up slightly.

I have been releasing some funds for a ‘dip into savings’ holiday trip. Generally selling overweight things like European equities.

And I have been hoarding cash in anticipation of the new ISA tax season starting early in April.

Lastly, in a completely meaningless ‘rage against the machine’ I have shifted out of some USA-run ETFs into their European-run (UK, in fact) ETFs with HSBC. This is easier to do with equity trackers than fixed income – there are no obvious European-run ETFs equivalents of IGLT or VGOV for instance.

I finished the month a little overleveraged, significantly overweight European/International equities and somewhat underweight on US equities. But I’m comfortable with this tilt for the moment

Appendix – press clips

5 thoughts on “Mar ’25: Anticipating tariffs”

  1. Well… it wasn’t tech/AI that let the steam out after all… just an own goal by a man painted orange.

    Any particular reason for moving to the UK domiciled ETF’s?  It’s a horribly complex and nuanced topic, and there are few good threads (if I recall correctly) on the bogleheads forums. The key points from memory:

    • Fees tend to be higher on the UK/IRE/Luxembourg domiciled ETF’s.
    • Withholding taxes – depending on your tax residency (and the DTA’s between the country you are tax resident in and the US, and where you hold the ETF’s (ie taxable accounts vs pension wrappers, etc) there can be quite substantial tax benefits for the EU domiciled ETF’s.
    • UK reporting status of the ETF also comes into play for taxable accounts for UK tax residents around tax treatment of distributions/CGT.
    • The big one however is US estate taxes, which are 40% on everything above 60k!  Definitely something to be cognisant of if you have higher priorities than enriching Uncle Sam upon your demise!

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      1. AFAIK it applies to NRA (non resident aliens), but I believe the figure is 40% of US listed ETF’s over 60K. I’m not a tax advisor, but I have lived in many places around the world and as a result, pored over a lot of DTA’s over the years!

        It’s a very complex and nuanced topic, and depends on your personal taxation situation (and the relevant double taxation agreements in place between your personal tax residency’s jurisdiction and the US), so I’d strongly recommend speaking to a tax specialist (although to be honest, after speaking to many over the years, I’m not sure anyone REALLY knows what’s going on! :)).

        You can check out the boglehead’s post here https://www.bogleheads.org/wiki/Nonresident_alien_taxation

        This is the relevant section:

        Warning: Where an account holder who is a US nonresident alien dies, and there is no US estate tax treaty coverage (or marital deduction for transfers to a US citizen spouse), the US will levy up to 40% estate tax[18] on US assets over the value of $60,000 USD.[19][note 11] This includes US domiciled holdings such as funds and ETFs, as well as cash sums in a US-based brokerage account,[20][note 12] stocks of US corporations, and US IRAs, 401ks, and similar retirement saving accounts,[21][note 13] but excludes cash deposits at a US bank and most directly-held US treasury bonds.[note 14][7][22]

        It’s something worth considering if you don’t live in the US, and are choosing which ETF’s to use. The higher fee EU/IRE/LUX domiciled ones can often be a better choice for non US citizens, but it does depend on their personal tax situation!

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  2. By golly, thank you for that. My own policy, easy for us to adhere to, is to own nothing that might be taxable by the US IRS.

    I shall, however, forward your remarks to members of my extended family. Some may blanche.

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  3. Ha! Blanching averted. An email reply includes “Thank you. Our financial advisor made us aware of this a couple of months ago …”

    Our own financial affairs have never needed a financial adviser. If I did go to one, however, it would be about technical stuff – taxes, trusts, what have you – not about simple stuff such as equities, bonds, cash, gold.

    For the latter I know that the key thing is not to check valuations too often – every year or two will do.

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