Kamala Harris and Donald Trump offer, at least on face value, very different economic platforms, with different investment opportunities.
Here's a general guide on where to consider buying in or cashing out, based on their general policies.
Note: This article is provided for informational purposes only and should not be construed as financial advice. The information is general in nature and does not take into account your personal financial situation, objectives, or needs. Before making any financial decisions, you should seek independent financial advice from a qualified professional.
If Kamala Harris wins: Consider renewable energy, tech and healthcare
Renewable energy and technology
Harris’s platform strongly favours investment in green energy, supporting renewable technology and infrastructure with incentives aimed at reaching net-zero emissions. She touts the Inflation Reduction Act, "the largest investment in climate action in history", as one of her achievements.
Australian and global ETFs focused on renewable energy, as well as ASX-listed companies involved in solar, wind, and battery technology, may benefit.
On the other hand, fossil fuel investments may come under pressure as green energy initiatives gain traction. Australian investors might consider offloading coal or oil stocks that are dependent on US market dynamics.
Technology and artificial intelligence
Harris's campaign has said it would continue Biden commitments to scale up the National Artificial Intelligence Research Resource, which supports AI-related research and provides training and development resources. She has also said she would defend the CHIPS Act, which was enacted in August 2022 and encourages microchip manufacturing in the United States.
Harris’s policies could accelerate the US’s AI and digital infrastructure growth. Tech-heavy funds and ETFs, particularly those with holdings in companies focused on digital infrastructure and AI, could see gains under a Harris administration.
Healthcare
With her plan to expand healthcare access through a public option, Harris may drive growth in the healthcare sector, benefiting companies involved in pharmaceuticals, medical devices or biotechnology, although Harris has also promised "to take on Big Pharma to make prescriptions more affordable".
If Donald Trump wins: Consider traditional energy, industrial stocks and financials
Traditional energy
Trump’s "drill, baby, drill" support for fossil fuels, including reduced regulations for oil and gas, could boost traditional energy stocks. Australian mining companies in coal, natural gas, and related sectors may also benefit if the US market shifts back toward fossil fuels.
Renewable energy and tech stocks might face a tougher regulatory environment if Trump’s administration slows down the push for sustainable and digital infrastructure
Industrial and manufacturing stocks
Under Trump’s protectionist approach, policies often favour US-based manufacturing and industrial sectors, aimed at strengthening domestic production and reducing dependence on foreign imports. His policies typically include tariffs on foreign goods, incentives for onshore manufacturing, and sometimes restrictive trade policies
For Australian investors interested in tapping into this trend, US-focused industrial ETFs that concentrate on American manufacturing and infrastructure development might be worthwhile. Also, Australian companies that supply raw materials or specialised industrial components may still benefit if they’re in sectors where the US is reliant on imports or where Australia has a competitive advantage. For example, lithium, rare earth and iron ore could see sustained demand, given limited US domestic supply.
Financials and consumer discretionary
Trump’s economic policies favour low taxes and reduced regulatory oversight, benefiting financial institutions and consumer spending. His pro-business approach might spur increased spending in sectors sensitive to interest rate adjustments and consumer sentiment.
Financial and consumer discretionary ETFs with holdings in US banks, finance companies, and major retail brands may perform well under a Trump presidency.
