Results of Finax Portfolios in the Half-Year of Trump's Tariffs

The first half of 2025 brought a real test of nerves for investors. When Donald Trump announced the introduction of reciprocal tariffs during "Liberation Day" in April, global stocks headed for a sharp decline. The US dollar, in which we hold most of our equity positions, also weakened, which further contributed to the decline in our portfolios.

The investment lessons in such situations are clear: don’t panic, keep investing regularly, or take advantage of the decline with extra deposits. Declines have always belonged to investing and each one was eventually followed by a recovery.

However, when a similar scenario really occurs, doubts begin to creep into your head. I’ve myself come across several online commentaries claiming that this time will be different and that Trump will completely subvert the modern economic system. That's when you start considering whether you should sell and wait to see how the situation evolves.

However, even Donald Trump could not ignore the pressure of the markets (especially the bond market, where the interest rates at which his country borrows increased). He retreated from the original level of tariffs and one of the fastest recoveries of stocks in history followed.

You can see it in this chart, which shows the performance of some of our portfolios. It also shows that market fluctuations did not affect our cautious short-term investment solutions (Wallet and Smart Deposit).

Disclaimer on Provided Data: All data related to the performance of Finax portfolios represent the actual achieved performance of model portfolios. The method for calculating actual performance is described in our article How Do We Calculate Portfolio Returns? Past results do not guarantee future returns, and your investment outcome may result in a loss. Be sure to understand the risks associated with investing.

I would like to point out two more interesting facts about recent market developments.

Firstly, despite the negative news, the profitability of companies is growing solidly. Companies included in the U.S. S&P 500 index increased their earnings in the second quarter by almost 12% year-on-year. Their profits maintained a double-digit growth rate for the third quarter in a row! That's a crazy pace given history. Companies managed to do it despite tariffs or threats from politicians.

Rising corporate earnings are crucial in investing. Since stocks represent shares in companies, profit growth is a key factor determining stock prices in the long run. 

The second interesting fact is that, after some time, international diversification has paid off over the past six months. U.S. stocks, which clearly outperformed the rest of the world in previous years, lagged behind international ones this time.

It is still too early to judge whether this trend will continue in the future. However, this half-year has demonstrated the importance of diversification. Investors who held international stocks experienced a milder decline and ended up with higher profits. You can also see it in this chart showing the development of selected ETFs from our portfolios since the beginning of the year.

In the past, we have often pointed out that when investing, it is important to hold securities from around the world. Trends have reversed many times throughout history, with different regions dominating in different periods. Only by holding them all can you be sure your portfolio will include the future winners, wherever they may emerge.

How did Finax portfolios fare in this environment? You can find the exact numbers in tables below.

If your savings are in a competing product, and this blog convinces you they would be better off with Finax, you can take advantage of our investment transfer discount. If you document the termination of an investment in a competing product, we will manage half of the transferred amount free of charge for two years.

Dynamic strategies

In investing, it is usually true that the greater the risk taken, the higher the expected return on the investment should be.

Our dynamic strategy consists exclusively of stocks, which are subject to sharper value fluctuations, making it our most volatile portfolio. In exchange, it should yield a higher long-term return. You can see its after-fee performance in the following table. Note that the final profit might be subject to taxation.

Over the past year, our passive dynamic portfolio managed to maintain a positive return despite global tensions, trade wars and tariffs. Compared to many competing portfolios, it benefited from broader international diversification.

In these blogs, we usually point out that when evaluating a stock investment, we should look at a longer period than one year. Anything can happen in the stock market in a single year, and you should never invest in these portfolios only for a short period.

The longer-term performance of our 100% stock strategy ranges between 8-11% per year, nicely matching the traditional expected return of global stock markets.

Balanced strategies

The SRI 3 risk category contains strategies made up of various mixes of stocks and bonds, which earned returns from 3% to 4% over the past year.

As you might’ve noticed, most of them outpreformed the dynamic strategy over the past year. They benefited from diversification into bonds, whose prices are more stable than those of stocks, making them more resistant during most market declines. That is why bond-based strategies are usually the safer option when you are looking to invest for shorter periods.

However, you can see that portfolios with higher shares of stocks delivered better returns over longer horizons. As expected, their higher risk rewarded investors with higher return.

Conservative strategies

The SRI 2 risk category includes portfolios built mainly on bonds. They are designed for shorter-term investments and subject to milder fluctuations in value. In addition to the Investing in ETFs bond portfolios, this category also includes the Wallet, a product for storing savings that you will need in 1 to 3 years.

All of the strategies achieved decent returns over the year ending June 2025, comfortably covering Eurozone’s inflation rate.

However, over a longer period of 5 years, bond strategies achieve only moderate gains or are in a decline. This is because in 2022, we experienced the sharpest increase in interest rates in history. Rising interest rates cause bond prices to fall. It is worth noting, however, that such a situation was extreme and historically unprecedented.

European Pension and Smart Deposit

Finax has a few other portfolios in its offer. European pension has a lower fee compared to classic strategies, thanks to which it achieves better performance.

Smart Deposit is a solution falling into the lowest risk category SRI 1. Its value is subject to almost no fluctuations. The yield reflects the central bank's base interest rate. Therefore, it is more of a solution comparable to savings accounts or term deposits in banks.

If you are convinced by these results, we remind you that you can take advantage of our generous discount for transferring your investment from the competition. We wish you relaxed investing without unnecessary stress and worries. Invest and relax.