Agility Update - September 2025
US tariff challenges, Bank of England caution and weaker US jobs data shape market expectations
Market-moving events
Tariff challenges mount. A US court ruled Trump’s use of emergency powers to impose trade tariffs unlawful, though most remain in place pending appeal. The decision may change how tariffs are applied rather than the policy itself. The US also added a 25% tariff on Indian goods after talks over agriculture stalled.
BoE signals caution. The Bank of England cut rates by 0.25% to 4% in August, with a closer vote than expected. Inflation is now forecast to peak at 4%, led by food and energy. Another cut this year looks less likely, though markets still see gradual easing into 2026.
US jobs weakness emerges. Revised data showed job growth below the level needed to keep unemployment steady, with large downward revisions unusual outside recessions. At Jackson Hole, Fed Chair Jerome Powell said the “shifting balance of risks” could warrant a September cut. Even so, high inflation suggests any easing will be gradual.
Investment highlights
Portfolio rebalance with added ETF exposure. We rebalanced all Agility portfolios in August and introduced one new ETF to reflect our latest tactical asset allocation view. This will ensure all portfolios remain diversified and responsive to global market opportunities.
Health care sector opportunity. The US health care sector has lagged the broader market by 41% over the past two years, with weakness accelerating after the US election on fears that incoming Health and Human Services Secretary Robert F. Kennedy Jr would impose tougher regulation. We have gained exposure to the theme through the iShares S&P 500 Health Care Sector UCITS ETF, reflecting our view that cuts to US research budgets will be offset by spending overseas and that tariffs pose less risk than in many other industries. Earnings growth has also recovered from the post-COVID slump and is now back in line with the broader market. After the recent pullback, the sector trades at a steep discount to its historical average, suggesting attractive value.
