How Wealth Managers Adjust Portfolio Allocation in Anticipation of Trump’s Victory

Investors Preparing Portfolios for a Potential Trump Presidency

Investors have started making their investment portfolios “Trump-proof” as the former U.S.
president leads in some opinion polls ahead of the November elections.
While many fund managers claim that the American elections could have minimal impact on markets, some have become more defensive, ensuring that portfolios are diversified across asset classes and regions to counter the impact of a potential second presidency of Donald Trump on trade and geopolitics.

John Roe, head of multi-asset funds at Legal & General Investment Management, states that “Trump is beginning to enter the narrative as the American elections approach”.
One of the risks of a Trump victory – or a Republican victory in the U.S.
presidency, Senate, and House of Representatives – is a global tariff.

The latest opinion polls show Trump ahead of the incumbent President Joe Biden, although many predict a very tight race.
Survey results from the Financial Times also indicate a close race between Biden and Trump.
Trump leads in six of the seven “swing” states in the U.S., which are more likely to determine the November presidential elections.
Combining all seven swing states, Trump is ahead of Biden by 6 percentage points.

Despite Trump’s favorable tax cuts for the wealthy, concerns remain among some investors regarding Trump’s trade, fiscal, and immigration policies, which they fear could fuel inflation.
However, many bond investors remain optimistic about the outcome of the U.S.
presidential race.

The markets seem prepared for a Trump presidency this year.
Unlike 2016, a Trump victory would not be a surprise, and the likely political implications are known.
The potential impact of Trump’s tariffs on markets should be factored in, suggesting that the overall outlook may not change significantly.