How we think
How we think
We are active investors. We focus on where we can make a real difference for our clients—to help them achieve their long-term investment goals.
Oct 14, 2020
With the US election in sharp focus across global markets, every piece of news flow is being carefully assessed as investor attention turns to both near-term opportunities and risk factors. In our view, it is preferable to cut out the noise by focusing on a bottom-up approach that can combat elevated levels of volatility, specifically by selecting high-quality businesses that can withstand a changing political and economic landscape. A Biden presidency - the Democrat holds a steady lead in the polls and has done for many months - could result in a range of implications for investors, and we explain how, in our view, our American Franchise strategy is positioned well regardless of any outcome on 3 November.
Firstly, healthcare reforms are a real possibility, with the system likely to come under scrutiny in the event Biden enters the White House; our American Franchise portfolio has highly selective exposure to niche, differentiated businesses that we believe should be relatively immune to any sweeping changes. The ‘big tech’ FAANG stocks – which account for more than one-fifth of the S&P – may face increased regulation; we attempt to mitigate this by seeking tech exposure through exciting structural trends such as digital payments and cloud computing. Trump’s significant corporate tax cuts could be partially reversed; our greater exposure to international earnings relative to the S&P should provide relative support to this headwind were it to occur. Finally, we believe our philosophy on climate change is more aligned with Biden than Trump, as our strategy has a minimal carbon footprint, with no exposure to the carbon intensive sectors which may come under pressure should the Democrat become the 46th US president.Download PDF
All investments carry the risk of capital loss. The value of investments, and any income generated from them, can fall as well as rise and will be affected by changes in interest rates, currency fluctuations, general market conditions and other political, social and economic developments, as well as by specific matters relating to the assets in which the investment strategy invests. If any currency differs from the investor’s home currency, returns may increase or decrease as a result of currency fluctuations. Past performance is not a reliable indicator of future results.