After Trump’s win, U.S. companies surged due to the market’s anticipation of lower corporate taxes and deregulation, a pro-U.S. business approach is likely to significantly influence your investments which is why we believe a thorough review of your holdings is essential.
HOW TRUMP’S RE-ELECTION AFFECTS THE ‘GLOBAL MEGA TRENDS’?
Since 2023, we’ve identified “mega trends” in areas like sustainability, technology, and emerging economies that present long-term investment growth potential. Our model portfolio is well-aligned with these trends and is currently outperforming its benchmark. We’ll share today how Trump’s policies may shape these sectors and impact our investment strategy.
Mega Trend 1: Technology
Trump’s potential deregulation plans may encourage tech sector’s further innovation by reducing compliance costs, though it could face opposition from privacy advocates. Tax cuts would increase after-tax profits, enabling tech firms to boost research and development. Heightened U.S.-China trade scrutiny could lead to tariffs, stricter rules for Chinese tech firms, and incentives for domestic production of critical tech components like semiconductors which is good for the U.S.
However, restrictive immigration policies may impact the talent pool in fields like AI and cybersecurity, posing hiring challenges for tech firms reliant on skilled foreign workers.
The technology funds which we recommend to our clients like #GuinessGlobalInnovators Guinness Global Innovators have reacted positively to Trump’s winning and is likely to continue to do so.
Mega Trend 2: Sustainable Investing
Trump’s energy sector support has boosted oil and gas sectors but raised sustainability concerns. His stance on environmental standards may limit federal support for green initiatives, impacting policy-driven growth in sustainable technologies. However, demand for sustainable investments is still strong, driven by climate concerns and investor priorities.
Globally, sustainability momentum, especially in Europe and Asia, remains robust which can balance U.S. headwinds. At Astra, our sustainable funds are actively managed and flexible, which can focus on resilient sectors like renewables, water infrastructure, and well-governed companies to align with both domestic and international ESG trends.
Mega Trend 3: Emerging Economies and Deglobalization
Trump’s “America First” policies may slow international trade and pose challenge to emerging markets—a focus area for Astra. However, some markets are better positioned. Due to Trump’s anti-China stance, emerging market funds with significant Chinese exposure could be negatively affected. Astra has already adjusted for this by moving away from China and prioritizing investments in India and Vietnam, two emerging economies driven by domestic consumption and bolstered by strong U.S. relations. This shift aligns with Astra Worldwide's strategy to capture opportunities in markets less impacted by U.S.-China tensions.
India and Vietnam’s economies are supported by strong domestic consumption, growing middle classes, and urbanization, making them less dependent on global trade. Both countries are emerging as alternatives to China for manufacturing, infrastructure, and tech investments. With strong U.S. ties these nations are well-positioned to attract foreign investment, particularly as U.S.-China tensions continue. The emerging market funds we use focus on high-quality companies in these markets to capitalize on these trends and minimize risks from global protectionist policies. So, we still see long-term opportunities in India and Vietnam in the emerging market sector.
OTHER INVESTMENT THEMES
In addition to the mega trends, Astra invests in other key themes that align with our clients' risk profiles and preferences. We actively monitor these themes to assess how they may be impacted by events like Trump’s reelection. This approach enables us to adapt to market shifts, providing clients with tailored exposure that suits their individual goals.
U.S. Small and Mid-cap Companies
The long-term outlook for U.S. small and mid-cap companies remains positive, as the anticipated benefits from tax cuts, deregulation, and greater growth opportunities driven by the deglobalization of supply chains in the U.S. are expected to outweigh risks. These companies stand to gain from reduced tax and regulatory burdens, potentially enhancing growth. However, challenges, such as potential labor shortages due to immigration policies and inflation impacts from tariffs, could affect profitability. Despite these factors, we still see opportunities for long-term growth in the U.S. small and mid-cap sector as these companies are valued significantly cheaper than larger companies in the US.
Currently, the VAM U.S. Mid-cap Fund we use has shown a positive response to Trump’s reelection, suggesting that the expected benefits could outweigh these risks for small and mid-cap stocks.
Treasury Bonds and U.S. Fixed-Income Market
Although the stock market is rallying, Treasury bonds initially sold off due to inflation concerns, particularly with potential tariff impacts. Rising interest rates from inflation may offset some benefits of tax cuts, causing caution among bond investors, particularly with long-term debts potentially requiring higher yields if inflation climbs. The bond market’s current performance reflects this cautious stance.
To mitigate these risks, Astra Worldwide is moving away from bonds and adjusting the portfolios of clients with bond exposure. We’re shifting to funds that balance stock gains with bond stability, such as the Sanlam AI Fund, available to lump-sum clients. This low-risk alternative fund uses AI to adjust stock and cash allocations automatically. When the stock market performs well, it increases stock exposure, and when the market declines, it invests more in cash to help reduce volatility.
These strategic adjustments highlight Astra Worldwide's competitive edge. As an independent firm, we’re able to select top funds from various managers to fit our clients’ specific needs. This flexibility allows us to prioritize high-quality investments, leveraging our autonomy to access funds that best align with each client's goals and market environment, without limitations on fund provider partnerships.
Cryptocurrencies
Trump's pro-cryptocurrency stance has fueled optimism among digital asset investors, with major coins like Bitcoin and Ethereum hitting new highs amid expectations of a more crypto-friendly regulatory approach. We’ve recommended Bitcoin to clients comfortable with higher risk assets and they’ve benefited from this exposure. While we see long-term growth potential in Bitcoin, it remains highly volatile. If you're considering adding Bitcoin or similar assets, please reach out to your Astra advisor to check if it aligns with your financial goals and risk tolerance.
OUR PERSPECTIVE AT ASTRA WORLDWIDE
We believe in a company’s fundamentals and performance over political shifts. While elections can influence the market, we believe that the mega trends are more significant drivers of long-term returns. This is why we focus on actively managed funds as expert fund managers can adjust portfolios in response to evolving policies, ensuring alignment with the broader investment landscape.
This view is echoed by Rob Gordon, one of the fund managers at VAM. During the Astra-hosted webinar on November 14th he emphasized that while a president can influence the market short-term, the primary market drivers remain consumer behavior, fiscal management, and sound monetary policy. As long as these elements stay strong, they underpin long-term market growth, regardless of which party holds office.
Active Management and Dedicated International Financial Advisors
This is why active management is essential at Astra, enabling us to seize opportunities, manage risks, and adapt to market changes, supporting both stability and growth. Having a dedicated financial advisor and team to monitor the market provides reassurance, helping you stay on track with your financial goals. Astra Worldwide Shields Your Investments by offering personalized advice and guidance tailored to your unique financial objectives. Astra’s advisors are here to help you understand how these major trends fit with your goals and offer expert support to help you navigate the complexities of investment. Reach out to Astra’s Financial Advisors to start or discuss your investment with us.
Know more about Astra Worldwide's Investment Team
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