To protect themselves, “investors should think about the companies that derive more of their revenue from domestic industries, that fact should work in their favor in the event of greater protectionism,” Matt Forester, chief investment officer of BNY Mellon’s Lockwood Advisors, told MarketWatch, adding that the group “already looks fairly attractive, because they’re the ones who should also benefit from tax cuts.”
According to FactSet data, Russell 2000 companies generate 79.4% of revenue from the U.S. exposure, whereas 69.7% of the S&P 500’s revenue exposure comes from the U.S.
“While we do not have a specific insight whether a trade war is realized, we have assembled a group of industries which have low exposure to a trade war,” Thomas Lee, a managing partner at Fundstrat Global Advisors, said in a note, pointing to companies with low exports as a percent of sales.
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