Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
Investment and Options Strategist
Summary: This article explores UCITS ETFs aligned with potential policy shifts under a Trump 2.0 administration, highlighting sectors like energy, financials, and defense that could benefit, while noting risks for renewables and consumer discretionary. Investors can use these ETFs for diversified exposure to key sectors responsive to U.S. policy changes.
In light of recent analysis on the potential impacts of a Trump administration on various sectors, investors may want to consider reallocating their portfolios to align with the new market dynamics. Charu Chanana’s article on key policy shifts under a Trump 2.0 administration outlines several areas where U.S. policy changes could reshape investment opportunities, from fiscal adjustments and trade tariffs to energy and tech policy. She notes that “deregulation and an emphasis on energy independence could favor traditional energy sectors, boosting oil and gas stocks,” and that “financials may benefit from rising yields and deregulation.”
Building on these insights, this article explores various accumulating UCITS ETFs that investors could use to gain exposure to sectors identified in Charu’s analysis as potential winners or areas to watch under a Trump 2.0 administration. This includes sectors such as energy, financials, defense, small caps, and others.
With a Trump administration likely to prioritize energy independence and reduce regulations on traditional energy, the U.S. oil and gas sector could see significant activity. Charu’s analysis highlights this potential, noting that “deregulation and an emphasis on energy independence could favor traditional energy sectors.”
Potential UCITS ETFs:
Financials, particularly banks, may gain from a Trump administration's approach to fiscal policy. Charu noted that “financials may benefit from rising yields and deregulation, with potential improvements in net interest margins and profitability.” Deregulation and possible corporate tax reductions could provide further tailwinds for the sector.
Potential UCITS ETFs:
Potential for higher defense spending due to geopolitical tensions could drive growth for defense contractors. Charu’s article points to “higher defense spending” as a possible growth driver in this sector.
Potential UCITS ETF:
Policies that favor U.S.-centric growth and tax cuts could support smaller domestic companies. Small-cap stocks, which are often more focused on U.S. operations, may benefit from a more domestic policy approach.
Potential UCITS ETFs:
Gold may offer a hedge against inflation, trade frictions, and market volatility, especially if tariffs and fiscal adjustments lead to economic uncertainties. Charu’s analysis highlights gold’s role as “a safe-haven asset and inflation hedge.”
Potential UCITS ETFs:
U.S. tariffs and trade tensions could affect regions like China and the EU, while other countries may attract capital as safer investment destinations. Charu suggests that “China and Hong Kong stocks” could face challenges, with capital flows potentially shifting toward markets like India and Japan.
Potential UCITS ETFs:
Certain sectors, such as renewables and consumer discretionary, may encounter challenges under Trump 2.0 policies. Tariffs and a focus on traditional energy could create headwinds for these sectors, suggesting investors may want to monitor performance or consider limited exposure.
Potential UCITS ETFs:
Big Tech may experience mixed effects under Trump 2.0, with opportunities in AI-related growth areas balanced by challenges from tariffs and potential supply chain disruptions. Charu points to a “commitment to reviewing and reducing unnecessary regulations on AI,” suggesting certain tech stocks may benefit from a lighter regulatory environment.
Potential UCITS ETFs:
As we look ahead to potential policy shifts under a Trump 2.0 administration, aligning investments with emerging trends may help investors navigate a dynamic market environment. Based on Charu Chanana’s insights, several sectors, including energy, financials, and defense, appear well-positioned to benefit from policy changes, while areas such as renewables and consumer discretionary may face more headwinds.
The accumulating UCITS ETFs highlighted in this article offer diversified exposure across these sectors, allowing investors to capture potential growth while managing risk through sectoral diversification. As always, investors should carefully consider their individual risk tolerance, investment goals, and time horizon when making portfolio adjustments.
By selecting ETFs that align with sectoral trends, investors can build a portfolio that is responsive to both domestic and global economic shifts, positioning themselves for potential growth opportunities in a rapidly changing landscape.
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)