The present trade dispute between the US and China presents an opportunity for investors, according to two investment managers.
Speaking on the latest episode of the FTAdviser podcast series Rathbones' James Thomson, who runs the £1.7bn Rathbones Global Opportunities fund, said the impact of global political events is often over estimated, and the negative sentiment this creates pushes down the price of attractive shares, and so becomes a buying opportunity.
Richard Saldanha of Aviva Investors said trade wars had a significant impact on a number of sectors, including US agriculture where farmers' incomes were getting squeezed as a result, which had a knock on impact on demand for farming equipment.
He added: "Autos have also borne the brunt from tariffs on steel and aluminium – the key for us when looking at companies that are impacted is whether they have pricing power which allows them to absorb some of the impact.
"Having flexibility in your supply chain is also important in terms of being able to mitigate the impact.
"But there’s no doubt it has been a headache for many companies and whilst the recent G20 meeting was positive in the sense we didn’t see any further escalation, we are certainly not out of the woods yet."
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david.thorpe@ft.com
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