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Tariff Uncertainty Underscores Impact of Active Management

BY | ETF Database
10/08/2025 | 144 VIEWS
Though Liberation Day is in the rearview mirror for the capital markets, it still continues to occupy center stage when it comes to market concerns from a forward-looking perspective. Investors who are mulling international equities exposure and those who are already allocated to them need to pay attention to how tariff impacts could affect their potential holdings.Thornburg’s client portfolio managers addressed the impact of tariffs on corporate earnings in their latest insights on the current state of the market. While the viewpoint offered was primarily seen through the lens of investing in U.S. equities, similar dynamics can also affect international equities. This is especially the case in the section regarding international trade and tariff considerations. “The ongoing U.S.-China trade tensions have created an environment of confusion and apprehension that has not yet reached a boiling point. Many companies are delaying capital expenditures as they await clarity on how tariffs will affect their operations,” the Investor Viewpoint noted. “The anticipated impact of tariffs, particularly those not expected to take full effect until later this year, probably heightens the hesitation. Although recent earnings from major tech companies exceeded expectations, many global firms have refrained from making definitive statements about their economic outlook.” “Understanding these implications will be key for investors to effectively allocate assets as they actively evaluate the market,” they added.The Active AdvantageIn terms of getting exposure, exchange traded funds (ETFs) offer the easiest ingress into international investing. The question now is: “Should investors opt for passive or actively managed ETFs?” “Passive ETFs might be the right choice for investors who seek index-like returns and prioritizes very low fees,” Thornburg noted when examining the ETF landscape and highlighting the differences between passive versus active funds. “Meanwhile, investors may gravitate toward active ETFs due to a desire to outperform the market — and a belief that their ETF is led by professional managers with the ability to do so.” For those looking to international equities exposure as a means to diversify, active management is almost imperative to navigate these nuanced markets. As mentioned, this is especially the case when factoring tariff impacts into the international investing equation. Given this, investors should consider funds like the Thornburg International Equity ETF (TXUE ) as well as the Thornburg International Growth Fund ETF (TXUG ). Both funds leverage the expertise and experience of Thornburg’s investment management team who can deftly navigate the international markets. TXUE presents an ideal choice for core international equities exposure while TXUG adds exposure to international companies with strong growth prospects. For more news, information, and analysis, visit our Portfolio Strategies Content Hub.

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