Trump tariff market turmoil has impact on investments

THE VALUE of Shetland’s public funds invested in the financial markets took a hit following the announcement of goods tariffs by US president Donald Trump earlier this month – but there is hope things will continue to recover.

Global financial markets have been topsy-turvy since Trump announced a series of new tariffs on 2 April, or “liberation day” as he called it – in effect taxes on goods from other countries, designed to boost American industry and economy.

However a week later he confirmed a 90-day pause to higher tariffs.

This uncertainty has caused havoc with the global financial market, which has had a knock-on effect on Shetland Islands Council and Shetland Charitable Trust’s investments.

As of 10 April Shetland Islands Council’s equity investments were valued at £284.5 million, compared to £322.7 million at the end of January.

The value of its pension fund equity investments sat at £572.6 million at 10 April, down from £663 million at the end of January.

For Shetland Charitable Trust (SCT), the value of its investments has also dropped.

The SIC and SCT pay fund managers to invest their reserves with the goal of making gains.

Both organisations dip into the reserves each year – the SIC to help fund day to day services, and the SCT to pay out funding to charitable organisations.

At the SIC the value of investments took a hit as a result of the market volatility.

But finance manager Paul Fraser said there are already improvements after Trump announced a pause to some tariffs.

“We are hoping that we will see a continued recovery of the position as the market sentiment settles,” he said.

Shetland Charitable Trust meanwhile is experiencing what it has called a “significant drop”.

The value on Monday 7 April was £417 million – a drop from £469 million on 31 December.

The value on 30 April 2024 was £424 million, rising to £433 million by the end of September before increasing again.

Financial advisers to SCT expect volatility to remain elevated as markets digest the longer-term implications of tariffs and US trade policy.

A spokesperson for SCT said advisers “believe the trust’s fund is well-placed to manage market volatility such as this, though there will clearly be some impact”.

“SCT is a long-term investor,” they added.

“All decisions regarding funding allocations are made within a strategic, long-term framework.

“The current volatility is not affecting our existing grant-funding framework.”