Is it unethical to invest in the US?

Are you supporting Trump by investing in the US stock market? This is a question being asked by a lot of clients, but it has two parts: is it time to remove US equity exposure? And how should investors reflect their values in a portfolio? Should your investment portfolio reflect the political and moral challenges of our age, particularly in relation to Trump-era policy and rhetoric?

The instinct to want to move away from the US is entirely understandable given current volatility and political distaste. Many believe that Trump has treated his allies with disdain and would rather shun American goods and services, from Coca-Cola to the stock markets.

However, we would urge some caution. The US remains a global engine of innovation and profitability. Despite justified concerns about valuations and political instability, US companies - particularly in technology, healthcare, and consumer goods—continue to lead the world. Even with recent turbulence, US firms generate approximately 60% of global equity earnings and remain at the forefront of emerging fields such as AI, biotech, and green energy.

We would also add that market timing rarely pays off and making significant geographical shifts in response to political events is a form of market timing. History suggests that this is exceptionally difficult to do well or consistently. Markets often price in bad news quickly and move sharply on any hint of resolution. By the time it feels “safe” to reinvest, much of the upside is often already gone.

Taking a global approach has been the right option in recent years. Over the past decade, global equity markets have historically rewarded investors who remained diversified through the various crisis - political (Brexit, Trump, war in Ukraine), economic (Eurozone debt crisis), or public health (COVID). Selling out of a key part of the global market today risks crystallising political discomfort into financial underperformance.

In terms of whether markets, and therefore investors, are ‘complicit’ in Trumpian economics, it’s a complex picture. In the last month or so, we’ve increasingly seen that markets and major institutional investors are not rolling over in the face of Trumpism. If anything, they have acted as an important brake on his activities.

Capital has become a countervailing force: some of the strongest opposition to Trump-era policies has come from corporate America itself - on climate change, diversity, internationalism, and even election integrity. Many of the companies in a typical US equity portfolio have publicly dissented from the administration’s stance or actively invested in more inclusive, sustainable futures.

Markets punish unpredictability. Far from backing Trump unconditionally, markets have repeatedly sold off in response to his more erratic trade policies, anti-Fed commentary, and policy inconsistency. Investors prize stability and rule of law, and Trump’s interventions often introduce precisely the kind of risk they resist.

The US market does not equal the US government: When you invest in the US, you’re not backing a specific administration, you’re buying into businesses that generate earnings from across the globe. For many S&P 500 companies, a significant chunk of their revenues come from non-US sources. These are international operations run by professional executives, not political proxies.

In other words, remaining globally invested, including in the US, is not an endorsement of Trumpian economics. In fact, global investors help hold all governments to account by allocating capital based on governance, transparency, innovation, and sustainability- not political weight.

To focus on the US tech firms, there’s no question that their extraordinary performance has been a defining feature of the past decade. This narrow leadership has contributed to a perception of overvaluation, and it is possible that we are approaching an inflection point, not just in market dynamics, but also in technological leadership and global competition. However, while some companies may now appear fully valued or vulnerable to regulatory and geopolitical shifts, others still hold significant competitive moats and global reach.

It is worth noting that much of the innovation in sectors such as AI, cloud computing, and green tech remains US-led, and the underlying strength of these businesses - particularly in terms of cash flow, balance sheet health, and global customer bases - remains robust.

In our view, global diversification is still one of the few ‘free lunches’ in investing. The US currently comprises over 60% of global equity market capitalisation. While this is certainly not a reason to be blindly invested, it reflects the global scale of US companies. A globally diversified portfolio helps manage risks we can’t predict, whether they come from politics, economic shocks, or sector-specific disruption.