Dan Scott

In September, we locked in the gains from our equity overweight, which had been in place since February, considering the high level of economic and political uncertainty. As Donald Trump was elected president of the US, we opportunistically reverted to an overweight position via US equities at the beginning of November. Conversely, we reduced our fixed income exposure by downgrading government bonds and emerging market debt to a neutral stance. With Trump’s victory, we now see a brighter economic outlook for 2025, thanks to higher fiscal stimulus and continuing monetary support. With global central banks still easing and the Federal Reserve having reaffirmed its commitment to cut rates, we believe the backdrop is becoming more favourable and the risks associated with a recession have receded. We expect Trump’s pro-growth measures to favour US equities in particular. 

We are overweight US stocks, which we expect will reap the most benefits from Donald Trump's policy mantra ‘America First’. While US stocks command a higher valuation than their counterparts, it is warranted when adjusted for factors such as growth and profitability. This is primarily confined to US technology companies. Meanwhile, stocks in the real economy have underperformed in recent months and could be due for a rebound. 

We continue to favour gold, which has beaten even the most bullish forecasts this year. Gold’s further upside may now be more limited but we think a slight overweight is still justified given our expectation of continued Fed easing. The metal could also provide hedging for portfolios amid the potential for increased geopolitical tensions under a Trump presidency.

The Widow Clicquot (film, 2023)