When Julian Bishop, the co-manager of Brunner (BUT ) investment trust, conjured up images of stock market crashes at the beginning of his career, he imagined everyone on the phone screaming to each other ‘Buy, buy! Sell, sell!’

Talking to Citywire earlier this month, with nearly 30 years of experience in the sector now under his belt, he painted a very different picture. 

In the immediate aftermath of Trump’s so-called ‘liberation day’ – which saw global marks tank after the imposition of sweeping tariffs in early April – Bishop described the London offices of his employer, Allianz Global Investors, as having ‘a library-like atmosphere’, explaining he does ‘surprisingly little’ during a market slump.

Bishop was one of three fund managers I spoke to, all running quite different investment trusts, to get an inside look at what actually does go on during a market crisis and how professional investors approach such volatile conditions. 

Julian Bishop, Brunner  

The £561m Brunner trust makes long-term investments in global equities with an overweight to the UK. 

In Bishop’s view, periods of crisis, in a relative sense, ‘suit’ a trust like Brunner. Putting his money where his mouth is, on the Monday after the initial 2 April tariff announcement, the manager took advantage of a dip to purchase more of his own trust’s shares. 

‘In times like these, the due diligence you’ve done in the past really comes to the fore,’ he said. ‘Investing in strong fundamentals, companies with good pricing power and strong balance sheets means you generally fare better. If you look at stock markets over the long term it’s very clear that it’s time in the market, not timing the market that counts.’

Bishop was clear where the trust stands on the politics behind the crash, saying: ‘We’re of a view that the tariffs are very harmful for everybody and are therefore really misguided policy.’

But he’s nonetheless been brushing up on the rhetoric of the MAGA set, in an effort ‘to try to understand the mentality of the key players’. He has recently read both JD Vance’s Hillbilly Elegy and Trump’s old trade adviser Robert Lighthizer’s No Trade is Free.

Bishop said marginal changes had been made to the Brunner portfolio in recent weeks, where quality companies looked cheap, but his overall advice for retail investors was ‘don’t panic’. 

‘The good news here is this is policy, so it’s reversible and there are still market forces at play that impose sensible behaviour on the US. Bond markets are very powerful, and the US needs to refinance a lot of debt, so it can’t do something that undermines the financial system altogether,’ he said.

George Barrow, Polar Capital Global Financials

Like Bishop, George Barrow, who helps run Polar Capital Global Financials (PCFT ), tries to avoid making ‘knee jerk’ reactions to volatile markets.   

The £584m listed fund is the only investment trust focusing exclusively on financial companies. It invests primarily in the banking, insurance and financial technology sectors, and is overweight European banks. 

The trust recently reported its best ever set of annual results, with its shares rising 45% in the year to end of November as higher interest rates boosted profitability for many holdings. 

Barrow said the strategy this month has been to ‘try not to do big swings in the portfolio but make assessments on a bottom-up basis’.

‘I think that anchors us. It gives us confidence making changes, as opposed to making top-down allocations where you’re in danger of being whipsawed because the headline noise is so extreme,’ he said. 

Nonetheless, Barrow has helped guide some substantial acquisitions over the last few weeks, taking advantage of ‘a really interesting risk and reward dynamic’ in the sector. 

‘We’ve leaned into some of the areas which are beneficiaries of volatility, so the trading platforms, the brokerages that are likely to see a higher level of customer activity, as well as some of the exchanges that have benefitted from higher volumes going through them,’ he said. 

The trust has also increased its exposure to emerging markets, especially India, investing in companies it believes will be ‘well insulated’ in case of further market upset.

Banks were hit hard by the initial tariff hike, fed by fears that a recession may be looming. However, Barrow said he’s ‘confident in the sector’s ability to absorb the shock’, explaining that balance sheets are ‘far healthier’ than they were in the ‘zero interest rate world’ of the 2010s.

Having been down nearly 20% at the peak, shares in one British bank holding, Barclays (BARC), are actually now up 1.4% this month. 

Dan Higgins, Majedie 

The £139m Majedie (MAJE ) trust invests significantly in equities and equity funds but follows a ‘liquid endowment’ strategy. In manager Dan Higgins’ words, this means investing in ‘differentiated return sources’ and not incorporating ‘deeply illiquid or hard-to-value assets’.

‘We don’t do private equity, venture capital, real estate, property, or infrastructure, partly because we don’t think it’s necessary to lock your money up for decades to deliver superior returns,’ he explained. In March, the trust’s top holdings included the Contrarian Emerging Markets fund, the Global X Copper Miners ETF and a specialist investment called ‘Project Uranium’.

The strengths of the trust’s more liquid strategy come to the fore when markets tank, Higgins argued, noting ‘flexibility is really important in a crisis’. 

Higgins saw this first hand when managing another large fund in 2008: ‘Going into that crisis a lot of allocators had locked money up into direct lending – similar to private credit strategies – and it didn’t just transpire that many of those strategies struggled during the financial crisis, but the opportunity cost of not being able to change your mind was huge.’ 

That said, the trust hasn’t had to make too many changes this month, as a market reset has been fundamental to its strategy.

‘It has felt to us for some time that the biggest opportunities lie outside many of the areas that have worked well since the global financial crisis,’ Higgins said. ‘The extraordinary events of recent weeks have only accelerated structural changes, the shifting of tectonic plates, that we thought were going to occur anyway.’

Majedie owns no investments the managers feel are predicated on a variable macroeconomic picture, steering clear of gold, index-linked bonds and government bonds, as well as currency trading.  

For those hunting for bargains, however, Higgins offered some words of caution.

‘I was a bit depressed to look at the number of crises I’ve had to navigate as a professional fund manager, but this one’s unlike any others,’ he said. ‘It’s not systemic, or external, but self-inflicted. Policy could change tomorrow and it’s difficult to know whether these are tactics or strategies. In my opinion, this makes it impossible to trade around.’