European pension providers have been looking to reassure savers amid the market volatility seen following the introduction of US President Donald Trump's new tariffs, emphasising that pensions are a long-term investment.

Trump announced that he would be introducing 10 per cent tariffs on imports from most countries to the US earlier this week (2 April), with higher "reciprocal" tariffs for the countries branded the "worst offenders".

Danish pension provider PFA chief strategist, Tine Choi Danielsen, acknowledged that the size and scope of the tariffs were worse than feared, with global stock markets opening in the red as a result.

The US financial market has since also recorded the biggest one-day loss since 2020, as the Dow Jones fell 3.9 per cent, the Nasdaq fell nearly 6 per cent and the S&P 500 was down 5 per cent.

Some changes are already being seen in response to the volatility , as Danielsen confirmed that PFA has reduced its equity risk amid this increasing uncertainty.

"In addition, we have tightened some levers here in the short term," Danielsen continued.

"Specifically, we have sold US stocks and reduced our exposure to the dollar. We have done this to protect our customers' pension savings at a time when there is so much uncertainty coming from the US."

Fellow Danish pension provider Velliv also announced that it had adjusted its share portfolio so that there is more focus on European stocks in anticipation of the market volatility that may be seen amid Trump's presidency.

"At Velliv, we already initiated a shift in our shareholdings at the end of 2024, when the result of the US presidential election was clear," Velliv deputy investment director, Thor Schultz Christensen, said.

"We have sold US shares for NOK 4bn and instead bought shares in many smaller European companies that are typically not dependent on exports to the US. This is a development that we expect to continue in the coming months."

Despite this anticipatory action, Sampension chief advisor, Helle Dalsgaard, said that it is "completely natural and understandable" for pension savers to be concerned about what this turbulence means for their savings, or to be tempted to reduce the risk with which their pension savings are invested.

"However, it is important not to panic," Dalsgaard said. "There will inevitably be periods like now with headwinds in the markets and declines, and of course that is never fun to experience.

"But you have to remember that the markets can quickly correct themselves, that pension savings are typically long-term investments, and that savings in the long term will not be affected by short-term turmoil.

"Therefore, it is generally the case that in times of great market turmoil, you have ice in your stomach and do not adjust the investment risk."

Dalsgaard also encouraged savers to "zoom out and see the development from a larger perspective", arguing that "it is much more the rule than the exception that Danes receive positive returns on their pension savings".

"In general, you should choose your investment profile in calm times based on income, consumption, wealth and family circumstances," Dalsgaard said.

This messaging was echoed by Danielsen, who emphasised that "pensions are long-term savings".

"The declines that have occurred must therefore also be seen in the light of the fact that a typical PFA customer has received solid double-digit returns in both 2023 and 2024," she continued.

"In the long term, we are therefore sticking to our overall investment strategy, where we have distributed the DKK 700bn that we manage for the Danes across a wide range of assets: stocks, bonds, properties, wind farms, forests and much more. It provides both returns and stability - even in turbulent times."

And whilst the scope and size of the tariffs may have been worse than expected, Dutch pension asset manager APG said that, despite the serious announcements coming out of Washington, the market reaction has been "relatively mild so far".

"So far, the reaction has followed a fairly classic pattern: stocks down, bonds up," APG expert strategist, Charles Kalshoven, continued.

"You could argue that the direction of the market response suggests a negative economic impact, but the magnitude of the reaction doesn’t exactly signal a recession."

In addition to this, Kalshoven pointed out that while investors "clearly" anticipate that shipping companies will suffer from restrictions on international trade, overall, it seems that investors believe the situation won’t be as severe as initially feared.

Despite this, Danielsen admitted that "things may get worse before they get better", as it is expected that the EU will respond with a coordinated response.

"So far, the EU has taken a wait-and-see approach, but has signaled that it is ready to respond," she continued.

"On April 13, the EU is expected to impose additional tariffs on a number of US products in response to Trump's tariffs on steel and aluminium.

"However, it appears that it will try to negotiate with the US before these tariffs are imposed.

"Trump has previously threatened even higher tariffs if other countries respond in kind, and things may therefore get worse before they get better."

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