The first 100 days of the Trump administration have seen State Street Global Advisors double its exposure to US technology companies in its Global Equity Fund, even if said exposure still trails the cap-weighted index.
SSGA global active quantitative equities chief investment officer Olivia Engel said the tech companies it's focusing on are generally mature, with strong cash flow, and in the software, hardware and semiconductor sectors. These investments reflected the 12% boost in technology stock prices over Trump's first 100 days as President; the MSCI USA Index returned 6% over the same period.
As above, despite taking a more bullish stance on tech companies, the Global Equity Fund remains underweight in the sector relative to its MSCI World ex-Australia Index benchmark, 16% of which is weighted to technology as at April 28.
Commenting on the overall equity market rally post-Trump, Engel said this could largely be attributed to the President's promises for stimulus spending, deregulation and tax reform.
"While these policies have yet to be detailed, once they are, the administration has upwards of 500 staffers who will work primarily to push forward Trump's plans for better healthcare, lower taxes and deregulation," Engel said.
"If they can help achieve compromises, equities may continue to rally. On the other hand, if gridlock persists or gets worse, we likely will see continued sluggish economic growth, rising inequality and greater debt."
As a result, Engel concluded, SSGA will continue balancing exposures to yield and defensives with growth opportunities until policy outcomes are clearer.