Investors everywhere are asking how the Trump Administration might change their investment strategies. Even if you only invest in mutual funds, this is a big deal. The changing of presidential administrations always causes some market uncertainty, but Donald Trump's rhetoric could shake up markets at unprecedented rates. With that in mind, it's important to think about Trump's presidency and how that might impact various mutual funds going forward. Read on for important questions to ask about the top 3 mutual funds during the Donald Trump administration.
What are the top 3 mutual funds going into the Trump administration?
We've evaluated several industry-leading mutual funds and these three are our favorites: the Vanguard Energy Fund, the Driehaus Emerging Markets Small Cap Growth Fund and the Vanguard Inflation Protected Securities fund.
Why should investors consider the Vanguard Energy Fund?
The Vanguard Energy Fund is an attractive investment opportunity because of Trump's expressed desire to reinvigorate the American oil industry, which has struggled mightily over the past couple years. This fund, and many others, focuses its portfolio across various facets of energy companies.
Why should investors consider the Driehaus Emerging Markets Small Cap Growth Fund?
The slogan "America first" is a core tenant of Trump's political approach. The Driehaus Emerging Markets Small Cap Growth Fund is based on a diverse portfolio of mostly domestic companies; it thrives on positive job creation and other local indicators of economic success. If Trump can strengthen the middle class, then this fund becomes a great opportunity.
Why should investors consider the Vanguard Inflation Protected Securities fund?
The Vanguard Inflation Protected Securities fund is uniquely shielded against inflation, with growth connected to changes in the inflation rate. This is a safe bet, given some of Trump's early rhetoric about implementing taxes on longtime trade partners with specific trade agreements. These taxes, if implemented, could lead to inflation in the United States, and in that case an inflation-protected mutual fund would be invaluable.
What makes mutual funds attractive under the Trump Administration?
Mutual funds are always regarded as smart investments because they're dependable and lower-risk. While Trump has made numerous pledges to boost the economy, he has also said things that might upset economic stability and lead to periods of market turmoil. Mutual funds offer greater protection from turmoil because of their diversified approaches to investing.
Which of these mutual fund companies is more well-known?
Vanguard is certainly one of the best-known investment companies in the world. You can choose a Vanguard account knowing you're in good hands. That said, Driehaus is also a great company with a reputation for great client services.
Do these top 3 mutual funds have high fees?
All three of these mutual funds have highly competitive fee structures, allowing investors to keep more of their profits. The Vanguard Energy Fund has an especially notable expense ratio of just 0.37 percent, which is significantly lower than other energy-focused mutual funds.
Should I invest in mutual funds that focus on bonds?
Many investors are worried about bond mutual funds losing value if interest rates go up. That's why we really like the Vanguard Inflation Protected Securities fund and other funds that offer protection from changes in the interest rates.