Janus Henderson portfolio manager Alex Crooke said domestic manufacturers in the energy, chemicals and machinery sectors would be the main beneficiaries of Trump’s wish to impose higher import tariffs.

While these would lead to higher inflation, requiring higher interest rates for longer, the fund manager of the Bankers Investment Trust (BNKR ) added that the tax cuts Trump also favoured would boost the healthcare, utilities and retailers sectors, which currently pay higher taxes.

However, in comments released yesterday before the result was known, Crooke said that hiking tariffs was not a win-win policy given the likelihood of overseas companies raising their prices in response.

‘History tells us that imposing tariffs tends to be a zero-sum game, with prices rising to offset the charges and other countries imposing their own tariffs. The loser tends to be consumers through higher prices,’ Crooke said.

Although the Federal Reserve is likely to press ahead with a quarter of a percentage point cut in interest rates tomorrow, expectations for another cut next month are fading as the central bank is less likely to be dovish in the face of the inflationary pressures Trump will bring. 

That could mute the attraction for real estate investment trusts that Jeremiah Buckley, the Janus Henderson manager in charge of the North American Income Trust (NAIT ), said offered attractive yields after several years of underperformance ahead of the US election.

‘In healthcare, we continue to find attractive ideas that are both defensive and offensive,’ Buckley said. ‘We believe these businesses will hold up well if we see a greater-than-expected macroeconomic slowdown. However, with the impressive level of innovation in biotech and medical devices right now, we should see attractive relative earnings growth even in a stronger economy.’

He added that large companies that invested heavily in research and development (R&D) would remain at the forefront of their sectors as large amounts of data informed strategy and gave them a competitive edge.

Demand for infrastructure to support the substantial demand for generative AI would continue for years, boosting semiconductor stocks, as well as applications using the technology, such as software and IT services, Buckley said.

Nevertheless, the $459m trust’s manager said his biggest concerns were whether companies got a solid return on all the capital spending in generative AI and whether the job market could maintain its current level of growth.

‘There is a risk that the returns on [companies’ AI spending] spending don’t materialise as expected which could lead to a rationalisation period of capital and R&D spending in the US which could lead to a material slowing in the economy,’ he said.

‘We worry that the hospitality and healthcare sectors are getting close to fully recovering from the pandemic pullback and there are signs that leading indicators for the construction sector are weakening. Thus, we are looking for more sectors to start contributing to job gains in a material way for the healthy job market we are currently seeing to persist.’

Shares in the 3.7%-yielding North American trust jumped 3.4% on Wednesday morning, while shares in Bankers, which has half its assets in the US and a large chunk in Europe, climbed 2.2%.