Amid Trump’s tariff shake-up, Javier de Berenguer, investment manager and fund selector at Mapfre Gestión Patrimonial, the Spanish insurer Mapfre’s unit that offers financial investment solutions, shares why they’re sticking with US markets—leaning into industrials, backing blue-collar growth, and trusting active managers to find opportunities in the chaos.
Question: Given the initial market rally followed by rising caution, how are you currently positioning your US equity exposure across Mapfre’s portfolios? Are there specific sectors or themes you’re leaning into or avoiding?
Answer: Our structural positioning in the American stock market has not changed. The fundamentals of its companies, the dynamism of the region, and leadership in key industries for the future are more than enough to continue to commit to the so-called “American exceptionalism.” The tariff policy being implemented by the Trump administration, with April 2 marking its peak, is generating a great deal of uncertainty and causing broad declines in its stock markets. In our opinion, with this policy that may sometimes seem erratic, Trump is addressing two of the main problems the American economy seems to have.
The first is immediate, aimed at refinancing nearly one-third of the public debt maturing this year. To achieve this, the state coffers require a sharp interest rate cut as soon as possible (hence the aggressiveness the president seems to be displaying when addressing such sensitive issues as tariffs). The second is a matter of vital importance to the country’s labour force (a key factor in Donald Trump’s election). In this case, it involves an expansion of the “exceptionalism” of the US economy, which has so far been largely concentrated in sectors tied to the more highly skilled working class (white-collar), and which is now intended to be extended to other sectors dominated by the blue-collar workforce. It is in these latter sectors of the US stock market where we are increasing our exposure — not only because we view them as a long-term opportunity, but also because we see them as a good source of diversification relative to the indexes (mitigating concentration risk).
Regarding all that happened in the past week (to 11 April), we expect a regime of high volatility in the coming months and it could be the case that we haven’t seen the bottom of markets yet. In the long term, we still think that US markets will hold their leadership over the rest. As these markets fall, we will seek to understand the opportunities to improve the long-term performance of our portfolios.
Question: You’ve highlighted volatility risks under Trump’s inflationary policies. How are you factoring in geopolitical uncertainty—like tariff swings or shifting trade dynamics—when selecting funds or managers?
Answer: Volatility and uncertainty are key elements of active management. In this scenario, where market consensus is increasingly seeking refuge in other geographies, we are not only following that trend but also taking advantage of the pullbacks occurring in the US market. In the short term, we cannot predict with precision what lies ahead economically, as much of the uncertainty being generated stems from the rise in binary events (tariffs or no tariffs, peace in Ukraine or no peace, etc.), which are difficult to forecast and have a significant impact on economic agents’ confidence.
Over the medium and long term, our duty as investors is to tune out the noise and focus on selecting teams able to generate alpha for the portfolios. We are coming from markets with a strong beta component, where company selection has taken a back seat and factor-based elements have largely driven price movements. We believe that, while these latter elements will always have some impact in the short term, fundamentals and earnings generation are already starting to take the lead.
“There are periods in the market when nothing happens, and then there are other moments when many things unfold. It is during these latter periods that active managers have the opportunity to build the alpha for the next 5–10 years.”
Question: With Trump’s push to revive American industry beyond tech hubs, do you see potential in small and mid-cap US equity funds or regionally focused strategies?
Answer: Industries closely tied to the manufacturing sector are best positioned to benefit from the long standing ambitions of the American president—ambitions he now seems determined to fulfil in his second term. Within these segments, small and mid-cap stocks caps will play a key role, though not exclusively. For these companies, it will be crucial to understand their debt profile and to assess whether the president’s new commercial model will truly be capable of driving revenue growth beyond the potential increase in input costs. In this regard, it will be important to closely monitor the progress of the negotiations in the trade war, as well as any points of agreement that may be reached. Tariff levels like those announced on Wednesday, April 2, combined with potential retaliatory measures from affected economies, would negatively impact both growth (downward) and inflation (upward), ultimately translating into lower corporate earnings.
However, if Trump succeeds in his objective and the US’ main trading partners agree to renegotiate and lower the tariffs imposed on American goods, we could see a scenario where growth outpaces inflation. On the other hand, we believe there are also large companies that are part of the US manufacturing sector, where positions can be taken without significantly increasing the portfolio’s sensitivity to interest rate movements (financing costs). Therefore, to answer the question, we see potential in both types of strategies, but we prefer those that are more flexible in terms of market cap. This is because they tend to have greater capacity to navigate the risks smaller companies face.
Question: Considering strategic sectors like semiconductors, AI and EVs, do you favour active or passive vehicles to capture these long-term growth themes, and why?
Answer: We are always going to recommend active investment vehicles, since in our opinion, the markets are never 100% efficient. This opens the door to making a better selection of companies than a benchmark index dictates. In sectors with a strong innovation component, it is precisely where a precise estimation of future earnings becomes particularly relevant, along with proper diversification. These are markets that tend to be in a very early stage of maturity, which leads to the concentration of winners, significantly increasing their valuations and, consequently, the risk of a bubble. In these growth segments, the emergence of new competitors often leads to a sharp correction in these “winners,” as we’ve seen with companies like Tesla and Nvidia with the arrival of Chinese competition. This alone doesn’t mean that these leading companies can’t be good investments at the current moment, but it does lead to significant price movements, creating the need for dynamic management of their weightings. By doing so, it allows investors to take advantage of price fluctuations to generate alpha.
“We are increasing our exposure [to blue-collar dominated sectors] — not only because we view them as a long-term opportunity, but also because we see them as a good source of diversification relative to the indexes (mitigating concentration risk).”
Question: As the US faces both cyclical and structural shifts, how are you balancing shorter-term macro risks with long-term innovation-driven optimism in your fund selection process?
Answer: Returning to one of the previous answers, the short-term is full of uncertainties and is difficult to anticipate. This leads us to focus on the long-term where price formation is much more efficient and will always follow earnings growth. Our application of everything discussed so far translates into a greater diversification of the weight we allocate to investing in the US market. We do this by reducing exposure to companies with greater international revenue and/or operations, while also underweighting tactically sectors and stocks that have performed well in recent years, leading them to exhibit somewhat demanding valuation multiples. In summary of our view, there are periods in the market when nothing happens, and then there are other moments when many things unfold. It is during these latter periods that active managers have the opportunity to build the alpha for the next 5-10 years. At Mapfre, we believe that we are currently in this second type of market, and for this reason, we are focusing on active managers in our fund selection.
Source: Fund Europe
