The evolving political landscape in the United States has led Swiss investors to seize investment opportunities related to the upcoming elections. Structured products focused on the US market, particularly actively managed certificates, are gaining popularity as a way to navigate the expected underperformance of the European banking sector.
These certificates, such as the Vontobel Republican 2024 US Election Index and the Vontobel Democrat 2024 US Election Index, are designed to align with the political positions of the presidential candidates. The Republican certificate has outperformed the Democratic counterpart, reflecting the market's sentiment and the potential impact of political outcomes on investment returns.
The inclusion of securities from the US banking sector in the Republican certificate has contributed to its superior performance. The US banking sector is expected to benefit from the "deregulation" policies proposed by Donald Trump, while the European banking sector faces challenges due to stricter regulations and low interest rates.
The healthcare sector in the US is also experiencing a surge in structured product issuance. Investors are capitalizing on sector-specific dynamics amid political changes. The nomination of Robert F. Kennedy Jr. as the next Secretary of Health and Human Services has raised concerns among investors, leading to declines in healthcare-related ETFs. This cautious sentiment has prompted the launch of a structured product that includes sector ETFs.
The biotech sector, particularly companies like Moderna, is seeing increased speculative activity. Julius Baer has introduced warrants on Moderna shares, given the scrutiny faced by the company and the complexities of the new administration's policies.
As the political climate continues to change, the interplay between regulatory changes and market performance becomes crucial for investors. The structured products market is adapting to these dynamics, offering innovative solutions for hedging against risks and capitalizing on emerging opportunities. The developments in the banking and healthcare sectors highlight the importance of strategic investment choices in a volatile environment.