The stocks to buy for a Biden win or a Trump triumph

Investors worry at presidential election time, especially when they are confronted by candidates as different as Trump and Biden. What should they do, asks Marianna Hunt

this area, such as Impax Environmental Markets.

STOCKS TO BUY FOR A TRUMP WIN Although the tech sector is likely to fare better under a Republican administration, not all stocks will benefit equally.

Mr Trump has called for a crackdown on social media firms such as Twitter and has criticised Amazon.

Rob Burgeman, also of Brewin Dolphin, said: “The tech stocks that are likely to do better if there is a Trump win are those that are less politically exposed, such as Microsoft and Applied Materials, which makes hardware for the semiconductor industry.

Although Microsoft owns networking site LinkedIn, it is not heavily exposed to social media.”

Among healthcare stocks, Mr Corbet said Illumina, which does research into genetics, and Edwards Lifesciences, which specialises in medical technology, were two high- quality companies in this sector.

“We think these will do well regardless of the election result, although both are a bit expensive. So even if Biden wins and share prices of healthcare companies fall, we would see that as an opportunity to invest,” Mr Corbet said.

Investors could take a broad approach and own a basket of healthcare or technology stocks via investment trusts such as Worldwide Healthcare.

DOES THE RESULT MATTER? Generally speaking, politics has had little impact on American stocks, said Robert Siddles, manager of the Jupiter US Smaller Companies fund.

“True, the prospect of a Democratic clean sweep – which has not happened since 1992 – should make investors nervous,” he said.

“But we are more focused on avoiding companies that could suffer in a post- Covid recession, like airlines and hospitality groups, than ones that could be affected by the election.”

British investors have turned to overseas stocks amid lacklustre returns from the domestic market. The average saver now only has 14pc of their money in domestic stocks, down from 39pc in 2005, according to the Investment Association, the fund management trade body.

This trend is unlikely to abate in the near future. The FTSE 100 index of Britain’s largest companies has lost 19pc this year, compared with a 1pc rise in global stock markets.

For investors looking elsewhere, a global portfolio provides exposure to a range of markets. There are a number of excellent funds but Scottish Mortgage, the £15bn investment trust, and the £21bn Fundsmith Equity fund have phenomenal track records, while the £ 2.1bn Vanguard LifeStrategy 100pc Equity fund is a popular “passive” alternative.

Those who wish to invest in specific regions overseas often start with America, which accounts for almost two thirds of the benchmark MSCI World Index. It is hard to look past the £5.1bn Baillie Gifford American fund, which has been a strong performer, although many prefer to use a passive fund as the market is normally diffi

‘The prospect of a Democrat clean sweep should make investors nervous’