Post U.S. Election Update: Holding True to Quality
Vontobel Asset Management serves as subadviser to the Virtus Emerging Markets Opportunities, Virtus Foreign Opportunities, Virtus Global Opportunities, and Virtus Greater European Opportunities Funds.
As the world digests the outcome of the U.S. election and the implications for trade and commerce, our foremost concern is, as always, to assess the implications for our clients’ portfolios.
Markets abhor uncertainty and surprise, and the Donald J. Trump victory for the presidency introduced both in ample supply. In just two days, the market whipsawed investors, first by fear that his yet-to-be defined policies would negatively impact the global economy, and then euphoria that they would bolster growth.
Our consumer staples holdings were impacted in the relief rally. Nevertheless, and despite the heightened stock market volatility, we are confident in the earnings growth of our global and regional strategies. The high quality attributes of the defensive companies we hold are inherently more resilient during periods of elevated risk aversion or sharp equity market declines, and over the all-important long term.
Equity markets ebb and flow with presidential elections and referendums, with headline news, with natural and man-made disasters. Many market participants chase performance, recast their portfolios, and look for ways to play the event-driven cycle. Of course, we also stress-test our portfolios and our view of their long-term potential: Is new information transitory, or is it signaling an underlying structural shift?
Past performance is not a guarantee of future results.
Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.