As Donald Trump enters the White House for his second term as President of the world’s largest economy, Hargreaves Lansdown have highlighted three actively managed funds for investors to consider.
Trump gives investors much to think about. His policies could well be inflationary and lead to higher interest rates, but his ‘America First’ approach to economics and foreign policies and promise of deregulation will throw up opportunities.
How you could invest for the new Trump era?
“The reality is likely to be somewhat less dramatic than the campaign rallies, and there are still many unknowns around how Trump’s policies will play out in practice. Good active managers can be worth their weight in gold in times like this,” said Victoria Hasler, head of fund research, Hargreaves Lansdown.
“That’s because they’ll be able to analyse and respond to any policy surprises quickly and adjust their portfolios to manage the risks and take advantage of the opportunities.”
Here are 3 fund ideas which investors could consider, written in Hargreaves Lansdown’s own words:
1. Artemis US Smaller Companies
Trump’s policies could likely be positive for domestic-facing US corporates, and that means US smaller companies could benefit.
Managed by the experienced Cormac Weldon since its launch in 2014, the Artemis US Smaller Companies fund seeks out smaller companies with potential for their share price to grow and could be a good option.
We like the way the manager considers how the US economy is performing to actively identify sectors and companies that are benefiting from trends, as well as areas that are finding things tough. We believe this could stand the fund in good stead to take advantage of new or changing policies put in place by the new president.
2. Rathbone Global Opportunities
If you’re unsure of what a Trump presidency could mean for global markets, you could consider an active global fund in which the manager can worry about the risks for you. The Rathbone Global Opportunities fund could be a good option to add some global diversification to your portfolio, while getting the benefit of an expert managing your positions. James Thompson, the fund’s manager, is one of only a few global fund managers to show they can pick great companies and perform better than the broad global stock market over the long term.
He looks for easy-to-understand businesses that can grow to dominate their industry and defend themselves from competition. He’ll also search off the beaten track to find companies with superb potential that might be overlooked by other investors. Thomson thinks exceptional companies are few and far between, so he only invests in a small selection. This gives each the potential to contribute significantly to performance. At the moment, he mainly invests in developed markets, like the US, UK and Europe.
3. Troy Trojan
If you’re worried about the impact of tariffs or political instability on the geopolitical situation, a more defensive fund could be a good option to help offer some shelter in turbulent times.
The Troy Trojan fund, managed by Sebastian Lyon and Charlotte Yonge, aims to grow investors’ money steadily over the long run, while limiting losses when markets fall.
The fund is focused around four ‘pillars’. The first contains large, established companies Lyon and Yonge think can grow sustainably over the long run, and endure tough economic conditions. The second pillar is made from bonds, including US index-linked bonds, which could shelter investors if inflation rises. Some of the fund is also invested in UK government bonds (gilts). The third pillar consists of gold-related investments, including physical gold, which has often acted as a ‘safe haven’ during times of uncertainty. We don’t think that gold will repeat the 30% return of 2024, but we do think it holds its value this year. The final pillar is ‘cash’. This provides important shelter when markets stumble, but also a chance to invest in other assets quickly when opportunities arise.”
