François Pascal, head of Multi Asset Investing at Amilton AM, has aknowledged that the French manager has been adjusting its view on US/North America exposure in light of risks seen linked to the 2020 presidential election in the US.
"We have been overweight the US equity market and the Nasdaq for a very long time, but we have slowly changed our minds [in recent] months."
"First, we believe that the trade tensions between the US and China will last longer than expected, as global leadership is the point. Until now, the trade war has been more harmful to China than for the US. But with time, we think China is more likely to better manage the consequences of the conflict than the US."
"Second, we are starting to worry about the rise of Elizabeth Warren in the polls, as she may well be the final Democrat candidate. Even if Trump wins the elections in the end, he may adopt in his electoral campaign a more social and less friendly approach for US equity markets."
"Third, if economic growth were to stay sluggish, then the low US equity risk premium compared to other regions would become a headwind for US equities."
Further views on US stocks and the 2020 presidential election can be found in the November edition of the InvestmentEurope magazine.