Funds set to benefit from Trump

Funds set to benefit from Trump

Pharma, banks and infrastructure are among the sectors forecast to benefit most from a Trump presidency, it has been claimed.

While there could be more volatility in markets over the next few days and weeks, some investment experts have said there are likely to be beneficiaries from Donald Trump’s Republican administration because of he is likely to be pro-business and plans a fiscal stimulus programme with significant infrastructure spending.  

Experts FTAdviser spoke to all agreed that his election is good news for the pharmaceutical industry, which could rebound from subdued levels when the market was concerned over the impact a Clinton presidency would have had on their businesses.

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In terms of funds that are set to prosper under Mr Trump’s reign, Darius McDermott, managing director of FundCalibre, said the lead manager on Brown Advisory US Flexible Equity is an industry veteran with 30 plus years of experience in steering investors through market ups and downs, which may prove invaluable over the coming months. 

Mr McDermott also pointed to Axa Framlington American Growth fund, which is run by another highly experienced manager, Steve Kelly, who focuses on finding companies with a unique competitive advantage, regardless of macro conditions. 

For something a bit different, Mr McDermott recommended Hermes US SMID Equity fund, which invests in a concentrated number of smaller and medium-sized companies. 

Mr McDermott said: “This may make it more volatile than larger cap US funds, but as we saw in the UK post-Brexit vote, smaller companies can sometimes surprise.”

Adrian Lowcock, investment director of Architas, pointed to Majedie UK Equity fund as one vehicle that could do well under Mr Trump’s presidency.

The fund is run on a multi-manager structure, with individuals responsible for sub-sectors within the fund. 

They share a core philosophy to be pragmatic and flexible, and as such they seek to buy shares with the highest upside potential. 

There is a focus on valuation gap and the fund has targeted deep value sectors of the markets.  

In recent years the themes in the fund have been banks, oil and gas and miners which they started to buy into last year, albeit early.  

Mr Lowcock said: “These sectors could benefit from the expected fiscal stimulus programme resulting from the election of President Trump and which is expected to spread across developed markets.”  

He also highlighted JPM US Equity fund under manager Clare Hart as a vehicle with a quality, value style bias. 

He said: “Their definition of quality is a durable franchise, not overly levered balance sheet, quality of earnings streams and a solid management team. Quality is the priority but they also want to ensure they are paying a good price.  

“The fund has around 10 per cent in banks and pharmaceuticals which have held back performance in the run up to the election, but should rebound following the result.”