Trading Trump: how to profit from the president’s unpredictable policymaking
Commodities, emerging markets and UK trusts expected to benefit.
Donald Trump may have an “America first” agenda, but his aggressive foreign policies and punitive trade tariffs have led to a “sell America” trend. This has seen several global markets and sectors outperform US equities over the past year. Experts believe a number of non-US investments could continue to thrive under his administration.
Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “You cannot ignore the US, but investors are spreading their bets, with both risky assets such as equities and safe havens such as gold hitting record highs in the last few weeks. The recent sell-off in gold highlights today’s extremely unpredictable environment.
“Strong earnings growth and AI-related spending continue to push US equities higher, but European indices had their best year since 2021 as investors rotated away from expensive US companies in search of better valuations. Emerging markets also benefitted from a weakening dollar and an influx of capital as US investors diversified.
You cannot ignore the US, but investors are spreading their bets, with both risky assets such as equities and safe havens such as gold hitting record highs in the last few weeks.
Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC)
“The UK saw its mid and large cap sectors benefit, helped by their weightings to commodities, banking and defence, which has spurred the FTSE 100 to all-time highs.”
The AIC asked financial advisers and wealth managers for their views on which sectors and investment trusts might benefit from Trump’s policymaking. Their comments are collated below.
Jason Hollands, Managing Director of Bestinvest, the online investing platform, said: “Trump has pushed America’s relationships with longstanding security allies and partners to the brink. As a result, faith in the US, in terms of trade, as a military ally and as a financial safe haven has frayed.
“Notwithstanding the bounce in the dollar in recent days following the nomination of Kevin Warsh as the next Federal Reserve Chair, the US dollar has weakened under the current administration as many institutional investors, notably central banks, have sold US assets.
“Precious metals are perhaps the main beneficiaries, having enjoyed raging bull markets as central banks diversify their reserves away from US treasuries. Despite the abrupt sell-off since last Friday, both gold and silver bullion remain in positive territory year to date following the stellar gains made last year. High bullion prices are favourable for trusts that invest in mining stocks such as BlackRock World Mining Trust.
“A weaker dollar is also a de facto stimulus for Asia and emerging markets, easing the cost of servicing dollar-denominated debts for both government and corporates, so there are good reasons to be overweight emerging markets this year. Key trust picks here include Ashoka WhiteOak Emerging Markets Trust and Templeton Emerging Markets Investment Trust.”
Tom Poynton, Executive Director at Baron & Grant, the investment adviser, said: “The greatest upside has come not from any single policy, but from the broader climate of policy unpredictability, rising geopolitical risk and fiscal indiscipline that has accompanied Trump’s presidency. Precious metals have been a clear beneficiary, with gold reaching successive record highs as investors seek protection against currency debasement and geopolitical risk.
“Notwithstanding the sharp correction in gold and silver prices over recent days, trusts such as Golden Prospect Precious Metals and CQS Natural Resources Growth & Income have been standout performers, reflecting strong exposure to gold and silver miners, though investors should remain mindful that mining equities are cyclical, valuations have risen sharply following a strong run, and heightened volatility is likely to persist. More diversified exposure can be found via BlackRock World Mining Trust, which combines gold with copper and other industrial metals, while BlackRock Energy and Resources Income offers a broader mix across mining, traditional energy and the energy transition.
“Beyond precious metals and commodities, energy security is another area of opportunity, with uranium benefiting from renewed government support for nuclear power. Geiger Counter is a unique trust that offers concentrated exposure to this theme, albeit with higher volatility given the portfolio's focus and concentration.”
Dan Boardman-Weston, Chief Executive of BRI Wealth Management, said: “The US is too big to ignore completely in your portfolio but for those with existing US exposure, diversification to other parts of the world makes sense.
“Despite the FTSE 100 delivering returns of over 20% last year, UK small and mid cap companies have continued to lag on a relative basis. Mercantile Investment Trust, which invests in a diversified portfolio of UK mid cap companies, appears well positioned to benefit from renewed capital allocation to the UK. A higher risk alternative is Aurora UK Alpha, which takes a more concentrated approach, investing in UK companies it believes offer compelling value.
“Overseas markets are also likely to continue benefiting from capital being reallocated away from the US and from a weaker dollar. Preferred options here include Schroder Oriental Income for diversified Asian exposure, and Ashoka India Equity Investment Trust for focused exposure to India, which I think has considerable scope for stronger long-term returns.”
Tomiko Evans, Chief Investment Officer at Crossing Point Investment Management, said: “One of the strongest performing sectors over the past year has been emerging markets. While tariffs have weighed on sentiment, valuations remain attractive. Increasing intra-Pacific trade has added resilience, with countries such as Vietnam and Malaysia gaining share within global supply chains and expanding industrial capacity. Fidelity Emerging Markets significantly outperformed its benchmark, supported by active positioning, selective exposure to technology supply chains, and effective discount management.”
Sell America is best viewed as a relative shift rather than an outright call. UK and European markets offer more attractive valuations at the moment, with stronger income characteristics and greater exposure to value-style companies with dependable near-term cash flows.
Tom Poynton, Executive Director at Baron & Grant, the investment adviser
Is the “Sell America” trade a valid investment strategy?
Tom Poynton, Executive Director at Baron & Grant, the investment adviser, said: “Sell America is best viewed as a relative shift rather than an outright call. UK and European markets offer more attractive valuations at the moment, with stronger income characteristics and greater exposure to value-style companies with dependable near-term cash flows. Trusts such as Temple Bar Investment Trust, Fidelity Special Values and Murray International Trust are well positioned for a rotation towards value, while Murray International also offers a differentiated global exposure with a focus on income.”
Jason Hollands, Managing Director of Bestinvest, the online investing platform, said: “Asia and other emerging markets look attractive, but Europe and Japan should be on investor radars too. In Europe, inflation is easing, rates are on a downward trend and increased defence spending provides a tailwind. Here, our top trust pick is Fidelity European Trust.
“Looking beyond recent negative news flow, Japanese companies have become steadily more shareholder friendly as a result of governance reforms, and the market should benefit from an expected uptick in global growth. Japan is also a hugely important player in robotics and automation, a growth sector that is highly intertwined with artificial intelligence. Our preferred trust is JPMorgan Japanese Investment Trust.”
Focus on defence
Tomiko Evans, Chief Investment Officer at Crossing Point Investment Management, said: “Heightened geopolitical tensions and a renewed focus on defence and strategic security have underlined the importance of real assets. Investment trusts such as BlackRock World Mining are well positioned to benefit from these long-term structural themes.”
Tom Poynton, Executive Director at Baron & Grant, the investment adviser, said: “Defence has shifted from being a cyclical theme to a structural one. In other words, investors do not need a world war scenario for the theme to play out – rearmament, intelligence, surveillance, cybersecurity and space-based defence infrastructure are now embedded long-term budget priorities across the US, Europe and NATO more broadly.
“For investors, this creates opportunities and not just in traditional defence contractors. Seraphim Space Investment Trust is a good example, offering exposure to the commercial space and defence ecosystem rather than headline weapons systems. The trust has meaningful weightings to companies involved in satellite imagery, communications, navigation and intelligence – all of which benefit from increased defence and security spending in a lower-intensity but more persistent geopolitical environment.
“Seraphim’s largest holding, ICEYE, is especially notable. The company is already deeply embedded in European and NATO security frameworks and has the potential to become a European champion in space-based intelligence – a strategic asset class that governments are likely to prioritise for decades rather than years.”
Trusts to benefit from a weaker dollar
Tomiko Evans, Chief Investment Officer at Crossing Point Investment Management, said: “A weaker dollar changes the relative returns of US equities for UK investors. While US equities have delivered solid performance in dollar terms, currency effects have meant that sterling-based returns from US holdings have lagged those available in other developed markets. Over the past year, UK and European equities have benefited from this shift.
“The UK market, in particular, has acted as an effective diversifier. It trades on some of the lowest forward P/E ratios among developed economies and offers a broader sector mix, with lower technology exposure and higher allocations to financials, industrials and healthcare. Increased share buybacks and renewed investor interest have helped drive performance.
“UK-focused investment trusts are therefore well positioned to benefit from a continued period of dollar weakness. Trusts such as Temple Bar have benefited from an intrinsic value approach and exposure to areas of the market where valuation support, corporate activity and shareholder returns have been improving.
“And of course there are other excellent trusts to choose from, including Fidelity Special Values, with its focus on smaller and mid cap companies, and City of London Investment Trust, one of the AIC’s dividend heroes, with terrific and consistent performance but with a more defensive, large cap bias. Lowland Investment Company has also done really well over the past year and is well positioned for the current environment.”
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Notes to editors
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