Danish pension provider PFA has reset its risk level to align with its “strategic starting point” following a first quarter (Q1) downgrade of US equity exposure prompted by trade tensions.

PFA chief strategist, Tine Choi Danielson, said this helped the pension provider benefit from the boost to US equities driven by a strong start to the US accounting season.

"We downgraded our equity risk in the US earlier this year due to the growing concerns about currency, trade and fiscal policy,” she explained.

“We have since adjusted back to a risk level that matches our strategic starting point. This has been a good decision, as US equities have recently received a nice tailwind from a strong start to the US accounting season.”

To date, she said that typical PFA customers have achieved returns of around 4 per cent on their pension savings.

In a statement on PFA’s website, Choi Danielson also welcomed the trade agreement between the European Union and the US, removing “many months of uncertainty from the stock markets”, according to the chief strategist.

The agreement, which was signed off on Monday, 28 July, will see the US impose a 15 per cent tariff on most European goods entering the USA.

On this, Choi Danielson said that although the 15 per cent tariff is “hard to be happy about”, the deal is “better than none”.

"That said, it's a framework agreement with room for exceptions, and we've seen in the past that deals with Trump are often written in sand rather than set in stone. But so far, it has been positive for the stock markets that some of the uncertainty is gone and that we have avoided further escalation," she said.

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