2025 Summer Leadership Series – Market Volatility and Tariffs Implications 

This summer, Connect Money is turning to the voices of respected industry leaders to assess what lies ahead for the economy and financial markets. As part of our Summer Leadership Series, we’ve invited asset managers, wealth managers, and institutional allocators to share their perspectives on everything from interest rates and tariffs to global economic headwinds. 

Over the next several weeks, we will be publishing their insights—highlighting key investment themes, policy inflection points, and the risks and opportunities that may define the second half of 2025 and beyond. Our contributors address critical questions on how to navigate current volatility, where to find resilient yield, and how to assess the risks of policy divergence, geopolitical tension, and persistent fiscal imbalances. 

We kick off the series with perspectives on current market volatility and tariffs, and what it means for the markets. 

Considering current market volatility, what proactive hedging strategies could investors employ beyond simply waiting?    

Heidi Wheatley, Founder, Sponsor Growth Solutions: In today’s environment, “waiting it out” may feel safer—but it can also mean missing opportunities or absorbing unnecessary downside. Proactive investors are increasingly looking beyond traditional hedging tools and embracing non-correlated, income-generating alternatives as a way to mitigate risk.

These alternatives don’t just protect on the downside—they help shift the focus from short-term price movements to consistent cash flow and capital preservation, which can help “smooth out” overall portfolio performance.  

Heidi Wheatley

The strategy may need to shift from trying to time the market—to investing in strategies that perform independently of it. 

Jay Frank

Jay Frank, President, Cantor Fitzgerald Asset Management: Uncertainty is the only constant in markets, and with equity multiples near cycle highs, relying on further multiple expansion or maintaining outsized public equity exposure may be imprudent. A more resilient posture may tilt toward private market strategies that grow cash flows organically, have inflation resilience and offer diversification benefits. In our view, private infrastructure’s short historical drawdowns and low correlation to stocks and bonds make it a compelling ballast, while commercial real estate offers an attractive entry point with natural inflation pass-through and portfolio diversification that traditional stock-bond mixes cannot replicate. This combination reduces dependence on equities to keep delivering above-trend returns and positions portfolios to compound through a range of macro-outcomes. 

Are tariffs prompting changes in investment strategies and how are you addressing client concerns about tariff-related portfolio risks? 

Michael Underhill, Founder and CIO, Capital Innovations: Tariffs have reawakened the geopolitical risk premium. We’re pivoting to resilient supply chain assets — logistics hubs, domestic manufacturing plays, and infrastructure facilitators of reshoring. Clients are asking tough questions, and we welcome that. We’ve responded by stress-testing portfolios for trade sensitivity and integrating higher-frequency monitoring. 

Michael Underhill

Derek Schug

Derek Schug, Head of Portfolio Management at Kestra Investment Management: Tariff uncertainty has been a meaningful risk to daily movements in both stock and bond markets for most of this year and will continue to be a factor that can cause above-average short-term gains and losses across assets, depending on the news of the day.   

While we never let one factor influence our investment decisions, it is certainly something we are following closely. At this point, there is too much uncertainty about whether the ultimate tariff policies will be a positive or a negative for companies or countries, so to date, tariffs have not played a major role in our equity positioning. Where we have more conviction is that tariffs are an additional cost in the financial system, irrespective of who you think ultimately pays for them, and in our view, will place some upward pressure on inflation, at least for a while.   

As such, we are maintaining a shorter-than-benchmark duration and including exposure to inflation-protected bonds to add some additional downside protection relative to the broad U.S. bond market.