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Fund Manager views on US presidential election results

Below are some Fund Manager comments on election results and what it may mean for the economy, the markets and investors.


BlackRock | U.S. election: Trump win

Key views: Republican nominee Donald Trump’s unexpected election win points to increased market and policy uncertainty ahead. We expect an initial sell-off in risk assets and flight to perceived safe havens. We see emerging markets as particularly vulnerable due to their reliance on exports and investor sentiment. We expect steeper yield curves and see health care stocks outperforming due to likely reduced regulation under Trump.





Fidelity Investments | Now what for markets?

Key views: The quiet, low-volatility days may be over for a while as investors react to uncertainty. A December rate hike may be less of a sure thing than a few days ago. It is important to have a good investing plan and stick with it.




Henderson | Trump victory: What now?

Key views: It is easy to identify immediate winners such as the infrastructure, defence and pharmaceutical sectors. Trump’s radical ideas and oscillating views will no doubt increase market volatility. Most investors are likely to interpret Trump’s views on protectionism negatively, and indeed global growth might be curtailed in the short term. We believe our portfolio is well positioned to benefit from these trends. Not only do we hold high levels of cash, the bond portfolio is short duration (which reduces volatility) and we also have close to a third of the portfolio in inflation-linked securities.



HSBC Global Asset Management | Donald Trump wins US presidency

At present, we favour being underweight developed market government bonds, whilst being overweight on a diversified basket of risk assets, including equities (in particular Europe and selective parts of EM) and local currency EM debt. US trade relations is the main area the President can act unilaterally. This will likely keep market volatility high as Trump’s rhetoric on this matter, especially on the North American Free Trade Agreement (NAFTA) and China, has been aggressive. This is likely to mainly impact emerging markets, given their high dependency on exports to the US.




J.P.Morgan | U.S. elections: A populist victory

Trump’s victory has elevated global uncertainty, partly because of the danger of a trade war and partly because it is not clear which parts of a very ambitious agenda of tax cuts, increased defense and infrastructure spending and health care reform can, or will, be implemented. Global financial markets have reacted in predictable “risk-off” fashion, with global stock markets and oil prices falling, and gold and U.S. Treasuries rising.




Schroders | How the market reacted to the US election: Four essential charts explained

Key views: We look at four charts: gold, the S&P 500 healthcare index, the dollar and the volatility index and explain how they reacted to Donald Trump winning the race for the White House.



November 2016

Please note that these are the views of the authors of the respective Fund Houses BlackRock, Fidelity Investments, Henderson, HSBC, J.P.Morgan and Schroders and should not be interpreted as the views of RL360°.



Authors

For BlackRock

BlackRock Investment Institute


For Fidelity Investments

Jurrien Timmer


For Henderson

Chris Burvill, Stephen Payne


For HSBC Global Asset Management

Macro & Investment Strategy team


For J.P.Morgan

Dr. David Kelly


For Schroders

David Brett


November 2016

Please note that these are the views of the authors of the respective Fund Houses BlackRock, Fidelity, Henderson, HSBC, J.P.Morgan and Schroders and should not be interpreted as the views of RL360°.