Trump wins. How are you positioned?

Nov 9th, 2016 | By | Category: ETF and Index News

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By Viktor Nossek, Director of Research at WisdomTree Europe.

Trump wins. How are you positioned?

Viktor Nossek, Director of Research at WisdomTree Europe.

At last. The long awaited decision on America’s 45th president has been decided. But regardless of whether you were Team Clinton or Team Trump, now’s the time to take a closer look at what you are holding in your portfolio. In the below, we outline our thoughts on positioning for both the short-term and the long-term using Exchange Traded Products (UCITS ETFs and Exchange Traded Notes). For more detail driving our initial investment view, read our US pre-election blog, “Allocating for a Trump or Clinton win.”

While there’s now certainty in terms of who the next US president will be, the near future is certainly uncertain. We have yet to see how exactly Trump plans to handle key issues like immigration, foreign trade and US defense.

Figure 1: More volatility in the near term

Trump wins. How are you positioned?

Source: WisdomTree.

In the short run, tactical opportunities are aplenty

The message to investors is to be prepared: volatility will continue in the short term, so hedge your broad exposure in equities and think about retreating back to safe havens – like gold. The highly anticipated rate hike might be put on ice so US Treasuries may become more attractive. Over the longer-term, we should see US equities gaining appeal.

Figure 2: The tactical view

Trump wins. How are you positioned?

Source: WisdomTree.

And in the long run…

As Trump is likely to look inwards toward the US economy, this should result in stronger domestic growth. Investors may consider a US small cap equity strategy and a US quality dividend strategy like the following:

WisdomTree US Small Cap Dividend UCITS ETF (DESE)
WisdomTree US Quality Dividend Growth UCITS ETF (DGRA)

(The views expressed here are those of the author and do not necessarily reflect those of ETF Strategy.)

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