Wealthy Investors Adjust Portfolios Before Election

By Tatiana Bautzer

NEW YORK (Reuters) – Most wealthy investors are considering changes in their portfolios ahead of the Nov. 5 U.S. presidential election, according to a survey by UBS released on Thursday. As investors focus on the economic policies of the candidates, 77% of them are considering new allocations, the survey found.

The economy is seen as the most important issue in the election by 84% of investors, and they are split on which candidate would better handle it. 51% of wealth clients surveyed said Republican candidate Donald Trump would handle the economy better, while 49% said Democratic candidate Kamala Harris would do better.

Those favoring Trump cited his approach to taxes, lower business regulations, and immigration policy. In contrast, supporters of Harris highlighted her policies for the middle class, healthcare, green energy, and independence of the U.S. Federal Reserve.

Investors believe that healthcare, materials, sustainable investing, and technology could benefit from potential Harris policies. They cited defense, energy, and industrials as sectors that would benefit more from a Trump presidency.

Jason Katz, senior portfolio manager at UBS Global Wealth Management, noted that an increase in investors seeking guidance for their portfolios is common in election cycles, but the bank recommends a cautious approach.
“We advise against any drastic changes, either in investment or tax management,” Katz said.

Historically, the U.S. equity market has shown similar returns regardless of which party wins the White House. The economic outcomes will depend not only on the presidency winner but also on Congress’s composition. Currently, Democrats control the Senate, while Republicans hold a majority in the House of Representatives.

A Trump presidency could contribute to inflation by adopting import tariffs, while less regulation may incentivize M&A transactions, benefiting primarily financial and fossil fuel industries. Conversely, if Harris wins without Democratic control of Congress, potential tax hikes could face challenges.

Katz expects stringent regulation under a Harris administration to impact mainly financials and fossil fuel companies. However, renewable energy and some industrial and material firms could benefit from her potential policies.