Trump's protectionist policies worry advisers

Trump's protectionist policies worry advisers

Donald Trump's protectionist policies have given advisers cause for concern over the direction of their clients' investments.

Research carried out among advisers by FTAdviser Advantage found 48 per cent of respondents believed an anti-globalisation, heavy-hitting US fiscal policy may cause more uncertainty among global markets. 

Although Mr Trump has softened his stance somewhat in the weeks since the Republican nominee became the President-Elect of the US, advisers still expressed concern about the ripple effect that high trade tariffs on Mexico and China may have.

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Only 7 per cent were feeling positive about the longer-term prospects for global equities. 

This came as fund managers have highlighted their concerns over what the new-look US presidency might mean for global investments.

According to State Street's global Investor Confidence Index, institutional investors are finding their own risk appetite starting to wane, decreasing to 98.9 over November, compared to 99.2 in October. A reading of 100 is neutral - the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.

The index is based on actual trades, not on the opinions of investors. 

Ken Froot, one of the creators of the index, commented: “While global markets continue to decipher the economic and political effects of a Trump presidency on the heels of Brexit the decline in the Global Index suggests that institutional investors remain reluctant to embrace market reactions.

"It is yet to be seen whether the stress deriving from upcoming events, such as the OPEC meeting in November and the ECB and FOMC meetings in December, will have any additional impact to the risk sentiment before year-end.”

Earlier in November, at the RSMR annual conference in Harrogate, manager Nicolo Carpaneda from M&G Investments, said there would be significant effects on global fixed income markets in store following Mr Trump’s election win.

These were: looser fiscal policy, Latin American protectionism, a more isolationist US, placing the Fed on hold, and a pharmaceutical rally if Obamacare was repealed and no aggressive drug pricing reform.