Nearly two thirds (64 per cent) of UK independent financial advisers (IFA) have been advising their clients to either maintain (50 per cent) or increase (14 per cent) their allocations to US equities, research from Franklin Templeton has found.

The survey, conducted by Opinium, showed that IFAs were looking past the short-term volatility and remained confident in the long-term returns of US equities.

Clients’ current exposure to US equities was remaining stable, with 45 per cent of IFAs currently allocating 10 per cent to 25 per cent of their clients’ portfolios to US equities.

Furthermore, over a third (36 per cent) of IFAs said they were allocating more than 25 per cent of their clients’ portfolios to US equities.

While many were holding firm on US equities, 60 per cent had changed their strategies in response to the tariffs announced on ‘Liberation Day’.

Among these, 16 per cent had increased their global asset allocations to actively managed strategies, while a further 15 per cent had increased their allocation to alternative assets as a hedge against volatility.

One in 10 (10 per cent) had either moved assets into defensive or lower risk holdings, or had rebalanced portfolios to reduce exposure to sectors affected by the tariffs.

While reports suggested that investors were reconsidering their US equity allocation, 40 per cent of IFAs said the tariffs had not influenced how they manage the assets of their clients.

“While tariffs may have shifted trade dynamics, the strength of the US economy and its global influence remain intact,” stated Franklin Templeton Institute global investment strategist, Michael Browne.

“The volatility from the new tariffs has created some short-term noise, but markets knew this was coming and have largely priced this in.

“The majority of advisers we surveyed are looking beyond the volatility, encouraging their clients to hold or increase their position in US stocks.

“History shows us that the US often absorbs trade shocks and recovers quickly, thanks to its fundamental structural growth, continuous innovation, and strong corporate earnings."

A third (33 per cent) of IFAs were seeking broader diversification through increased allocation to sectors outside of the ‘Magnificent Seven’, while 50 per cent agreed that the US equity rally would broaden beyond mega-cap tech.

However, 39 per cent of IFAs believed the ‘market broadening’ narrative was overhyped, and mega-caps would continue to lead.

More than half (53 per cent) saw opportunities in mid-cap investments over the next 12 months, while small- and large-cap investments were tied at 24 per cent.

“As we navigate the complexities of the current market landscape, uncertainty is a prevailing theme,” said Franklin Templeton head of UK wholesale, Harry Reeves.

“Despite this, IFAs are adopting a more optimistic outlook, suggesting that not all factors will significantly impact US equity market volatility.

“Amidst this uncertainty, growth and value strategies can offer compelling opportunities, providing a potential sweet spot for investors seeking to balance risk and reward.”

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