No wholesale changes
Angel Agudo, portfolio manager of the Fidelity American Special Situations Fund, said: “The run-up to the US election and associated political uncertainty could potentially add to the volatility in the market; nonetheless, irrespective of who wins the US election, I do not expect wholesale policy changes.
“From a sector perspective, healthcare stocks could witness some volatility if there are further comments around pricing in the sector. However, I remain confident in the current healthcare holdings in the portfolio and also believe that companies that exhibit innovation will be able to keep their pricing power.
“The defence sector is also in the spotlight around elections, but this time, I do not see the defence budget as the focal point of any of the campaigns. On the whole, the short-term volatility in the run-up to the election can create buying opportunities and I remain committed to my investment process and continue to focus critically on long-term fundamentals,” Agudo said.
Sustained regulatory pressure
Aditya Khowala, portfolio manager of the Fidelity American Fund, does not expect to see any drastic policy shifts either: “The focus will remain on the economy, where we are seeing some mixed signals. A combination of tightening liquidity conditions and falling inflation expectations continue to restrain the Federal Reserve’s ability to raise interest rates.
“There are also some indications that the banking sector could see sustained regulatory pressures. Going forward, there may be some room for fiscal policy to be used to support growth in the form of infrastructure and defence spending, which could create interesting investment opportunities.
“While there is true value in the cyclical parts of the market, it remains important to be very selective. The portfolio is built from the bottom-up and consists of businesses benefiting from long-term secular growth trends,” Khowala said.
