View the article online at http://citywire.co.uk/money/article/a632354
Fiscal cliff lurks menacingly over Obama's victory
‘I’m thinking of buying a hospital’ says one fund manager as investors pick over the winners and losers from Barack Obama's victory.
Some investors say it just doesn’t matter that much for equity markets who won the election, pointing instead to fundamentals, which include a growing conviction that the US economy is recovering. ‘While markets may be volatile post-election, we believe that over the longer term, US equities will gain support from the fundamental strengths of the economy,’ said Cormac Weldon, who manages the Threadneedle American Select fund.
However, monetary policy, and hence bond prices, could perhaps have changed under Romney, who had pledged to replace US Federal Reserve chairman Ben Bernanke, under whose leadership the central bank has committed to keep monetary policy loose.
'The key investment conclusion is more US quantitative easing,' said Artemis fund manager Simon Edelsten. 'In the Global Select Fund , we have added to our US bank holdings, Wells Fargo, Suntrust and PNC, where Federal purchases of distressed mortgage assets lower banking risk,' he added.
David Leduc, the A-rated bond fund manager of the BNY Mellon Global Strategic Bond fund, said Obama’s extended stay in the White House would be ‘a mild negative’ for riskier assets. ‘However, we do not see this changing much given that US fiscal cliff resolution remains an open question. As such, we do not expect to change our current strategy based on these results.’
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by Gavin Lumsden on Dec 19, 2014 at 17:24