Kamala Harris and Donald Trump offer, at least apparently, very different economic platforms, with different investment opportunities.
Here is a general guide on where to consider purchasing or withdrawing, 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, technology and healthcare
Renewable energy and technology
Harris’ platform strongly favors investments in green energy, supporting renewable technology and infrastructure with incentives aimed at achieving net-zero emissions. She touts the Inflation Reduction Act, “the largest climate investment in history,” as one of her successes.
Australian and global ETFs focused on renewable energy, as well as ASX-listed companies involved in solar, wind and battery technology, could benefit.
On the other hand, fossil fuel investments could come under pressure as green energy initiatives gain traction. Australian investors may want to consider selling coal or oil stocks that are dependent on US market dynamics.
Technology and artificial intelligence
Harris’ campaign has said she will carry forward Biden’s commitments to expand the National AI Research Resource, which supports AI-related research and provides training and development resources. He also said he would defend the CHIPS Act, which was enacted in August 2022 and encourages microchip manufacturing in the United States.
Harris’ policies could accelerate the growth of the United States’ artificial intelligence and digital infrastructure. Tech-heavy funds and ETFs, particularly those with holdings in companies focused on digital infrastructure and artificial intelligence, could see gains under a Harris administration.
Health care
With her plan to expand access to health care through a public option, Harris could spur growth in the health care sector, benefiting companies involved in pharmaceuticals, medical devices or biotechnology, although Harris has also promised “to take on Big Pharma to make prescriptions more accessible.”
If Donald Trump wins: Consider traditional energy, industrial and financial stocks
Traditional energy
Trump’s “drill, baby, drill” support for fossil fuels, including reducing oil and gas regulations, could boost traditional U.S. energy supplies or drive greater demand for fossil fuels.
Australian resources companies with US assets could benefit.
Technology and renewable energy stocks could face a tougher regulatory environment if the Trump administration slows the push toward sustainable, digital infrastructure.
Industrial and manufacturing stocks
Under Trump’s protectionist approach, policies often favor US-based manufacturing and industrial sectors, aimed at strengthening domestic production and reducing dependence on foreign imports. Its policies typically include tariffs on foreign goods, incentives for onshore production, and sometimes restrictive trade policies
For Australian investors interested in capitalizing on this trend, US-focused industrial ETFs that focus on American manufacturing and infrastructure development could be worth it. Additionally, Australian companies that supply raw materials or specialized industrial components may still benefit if they operate in sectors where the United States is dependent on imports or where Australia has a competitive advantage. For example, lithium, rare earths and iron ore could see sustained demand, given limited US domestic supply.
Finance and discretionary consumption
Trump’s economic policies favor low taxes and reduced regulatory oversight, potentially benefiting financial institutions and consumer spending. His pro-business approach could spur increased spending in sectors sensitive to interest rate adjustments and consumer confidence, although his pro-tariff approach could also lead to sustained inflation.
Financial and consumer discretionary ETFs with holdings in U.S. banks, finance companies and major retail brands could perform well under a Trump presidency.