Clinton v Trump: Which industries win?

Two debates down and about a million barbs in, the Clinton versus Trump spectacular has become prime time viewing. Politically, culturally, socially and economically, the United States’ upcoming election will impact countries around the world.

From an investors’ perspective, some industries are likely to be bigger winners than others, depending on who steps up to the plate as America’s 45th president.

Along with our friends at Fidelity, we’ve taken a quick look at how a few key industries might fare under Clinton or Trump.

  1. Agriculture. Clinton has shown a much more liberal attitude towards immigration, which could be a benefit to sectors with high levels of migrant workers, including agriculture.
  2. Clean energy. Clinton is a keen advocate of environmental protection, which bodes well for industries like solar and wind power. Trump opposes environmental regulation and has a somewhat ambivalent attitude to climate change, which means US fossil fuel producers, including shale producers, the coal industry and refiners may get a good run.
  3. Pharmaceuticals and health care. While drugs will always be needed, both candidates have mentioned drug pricing is an area of concern and Clinton’s track record in the health care sector is particularly well-known. If regulations on drug price increases were introduced, pharmaceuticals’ profits could obviously come under pressure. On the flip side, Clinton has committed to continuity for Obamacare, which means health care providers and insurers that have seen pick-ups since the act was passed could continue to do well.
  4. Defence. Trump says he wants to double the share of military spending in gross domestic product. Defence contractors and military hardware manufacturers could benefit in this scenario.
    Construction and infrastructure. These industries are expected to be winners regardless of the election victor, as both sides are selling a message around building for America’s future. Trump might go about this slightly more aggressively, based on some of his comments, although Clinton has more clearly outlined policy objectives.
  5. Restaurants and hospitality. Clinton calls for a much higher minimum wage. This could disadvantage sectors and companies that employ large amounts of low cost labour, such restaurants and hospitality, as well as perhaps retail and manufacturing.
  6. Free trade. Trump is generally opposed to freer trade and Clinton has been edged towards this position too throughout the campaign. Trump wants more tariffs, which could hurt import-driven sectors – not to mention international markets themselves; for example, many emerging markets are concerned about how a Trump presidency might impact their trade with America.
  7. Corporate tax reductions. This is one of Trump’s big calling cards and could be potentially beneficial to all sectors if implemented. The reality is, though, that the money to fund America has to come from somewhere and if government debt increased significantly this could be bad news for US treasury bonds.

Our Elite Rated Fidelity Global Dividend fund currently has around a 33% weighting to US shares in its portfolio¹. You can also check out the full range of Elite Rated US equity funds.

¹Source: Fidelity Global Dividend September 2016 monthly fact sheet

The views of the author and any people interviewed are their own and do not constitute financial advice. However the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.