In the lead up to President Trump’s inauguration, investors expressed optimism about the prospective policy mix, and the internal consistency of the campaign narrative. Many felt confident that Trump would do whatever was required to support the economy and markets, with an ongoing push for deregulation, tax cuts and hopes of pragmatism on trade policy. Since the inauguration, trade war fears have returned, as has debate around the inflationary consequences of deglobalisation, with Trump talking tough on tariffs.
Against this backdrop, the WAM Global (ASX: WGB) portfolio is well positioned to navigate these turbulent times, owning a collection of high-quality businesses which tend to enjoy a degree of pricing power, and we are staying active in applying our process of investing in undervalued growth companies with a catalyst. The team continues to travel, attending industry conferences in January, and meeting with management of companies from across the world. This differentiated access is core to our process and even more useful in a rapidly evolving landscapes such as what we are currently experiencing.
For more in depth analysis on the impact of tariffs, austerity and investing through uncertainty, read my article: ‘Navigating the sticker shock from US tariff policies’.
Since Trump’s election win we have had several high-profile government appointments which will likely be impactful for markets, from former hedge fund manager Scott Bessent as US Treasury Secretary to Andrew Ferguson as the new Federal Trade Commission Chair. Ferguson’s appointment signals a shift towards reduced regulatory intervention and faster deal approvals, likely boosting merger and acquisition activity in 2025. For more on what that means for the US economy and WAM Global’s portfolio, read Senior Investment Analyst William Liu’s article.
Stock Spotlight
Intercontinental Exchange
(NYSE: ICE)
Intercontinental Exchange, or ICE, is the leading provider of technology services for the US mortgage market, from origination through to servicing. ICE has built this end-to-end offering through organic investment and acquisitions over the past decade, and since completing the acquisition of Black Knight in 2023, it has secured client wins across major U.S. banks, including J.P. Morgan and Fifth Third Bank – evidence of the value of its end-to-end offering. The ability to continue migrating legacy and competing systems onto ICE’s technology creates a multi-year path to drive this business at attractive growth rates. In the shorter term, due to increase in interest rates from 2022 to 2024, mortgage market activity remains well below normalised levels. As interest rates decline, we anticipate clear pent-up demand for mortgage activity across both origination and servicing, which will act as a catalyst to drive this business over the coming quarters.
