Read More
Felix Wintle
Fund Manager
In the end, it wasn’t close at all. All the pundits and forecasters were wrong about Donald Trump, just as they were in 2016. An interesting volte face among some key constituents of the electorate, most notably Latino and African American men and many women, swung the election for Trump. A clean sweep in the House and Senate and a win in the popular vote meant the ‘closest election for decades’, was in fact a landslide.
There are many reasons why this is bullish for America, here are my top three.
Firstly, the appointment of Robert Kennedy Jnr as head of the Department for Health & Human Services. RFK Jnr campaigned on a Make America Healthy Again message and he is looking to disrupt the way healthcare is paid for and examine closely how drugs are approved and marketed. This has unnerved healthcare investors, and the sector has underperformed the S&P 500 by 15% since the election. He also has Big Food in his sights, viewing that industry as a big part of the healthcare crisis in America. The chart below shows that America spends more than any other nation on healthcare but has demonstrably worse outcomes. Something is very wrong here and a fix is way overdue.
It is a great step forward for America and its citizens that they finally have someone who sees the healthcare problem clearly and has a mandate to do something about it.
Secondly, the debt and the deficit. Whilst Trump is viewed as a president who will want to spend, he does have a team around him that understands the importance of fiscal discipline. What has now become known as DOGE, or the Department of Government Efficiency, will be led by Elon Musk and Vivek Ramaswamy, two razor-sharp intellects, who understand the problem of Federal overspending and have the wherewithal and the political stomach to get the fiscal house in order. Some evidence of this can be seen in the significant recovery in the dollar, which has moved sharply higher since the election. A strong dollar is an important vote of confidence in the new administration and will also help in the ongoing fight against inflation, which continues to be a concern for many.
Thirdly, investors can look forward to deregulation in many sectors and an easier environment for M&A. There has been a marked slowdown in the number of mergers and acquisitions over the last several years, as many deals have been stopped mainly due to competition fears. But the likely replacement of Lina Khan as head of the Federal Trade Commission (FTC) and Gary Gensler at the SEC, should make for a more pro-market environment.
One of the great advantages of being an active manager is the ability to change as the prevailing conditions do. We have exited healthcare, now zero weighted, and have added to our weightings in Industrials and Financials. We have added brokers, banks and also Coinbase which is a likely beneficiary of the significantly improved backdrop for crypto.
WARNING: All information about the VT Tyndall North American Fund(‘The Fund’) is available in The Fund’s prospectus and Key Investor Information Document which are available free of charge (in English) from Valu-Trac Investment Management Limited (www.valu-trac.com). Any investment in the fund should be made on the basis of the terms governing the fund and not