By Gwladys Fouche
OSLO (Reuters) -A return by former President Donald Trump to the White House would increase geopolitical tensions and be negative for the global economy outside the U.S., an official at the world’s largest wealth fund said on Tuesday.
Republican Trump and Democratic candidate Vice President Kamala Harris are in a tight race to win the Nov. 5 election, with a glum electorate saying the country is on the wrong track, a Reuters/Ipsos poll found.
“The Republican (candidate) is probably the one that could … exacerbate further the geopolitical tensions that we see,” Trond Grande, deputy CEO of Norges Bank Investment Management, which operates the $1.8-trillion fund, told Reuters. “There’s more talk about tariffs and sanctions on one side than the other.”
Asked whether Europe in particular would be negatively affected by a Trump victory, Grande said European companies that deal closely with Chinese companies would be hurt most under a Trump presidency. Trump has said he would hike tariffs on Chinese products.
Some 27% of the fund’s investments were held in Europe as of June 30, according to fund data.
The domestic U.S. economy – in which half of the fund’s investments are located – would remain broadly the same, regardless of who wins the election, Grande said.
“The difference between a Democratic and a Republican candidate … wouldn’t be as important necessarily for the U.S.,” he said.
MIDDLE EAST
Regarding the escalating conflict in the Middle East, the fund was “definitely monitoring” the situation, from both the perspective of how it affected its holdings in the region, and more broadly “if this escalates further and becomes more of a global thing”.
Earlier on Tuesday, the fund posted a profit of 835 billion crowns ($76.41 billion) in the third quarter as falling interest rates lifted stock markets.
Its return on investment was 4.4% for the July-September period, 0.1 percentage points weaker than the return on its benchmark index.
Equities – accounting for 71.4% of its value in the quarter – recorded a 4.5% return. Fixed-income investments, which account for 26.8% of its assets, meanwhile returned 4.2%.
“The main theme was one of falling interest rates… You saw pretty much all sectors performing,” said Grande. “A good quarter for us.”
($1 = 10.9278 Norwegian crowns)
(Reporting by Gwladys Fouche, editing by Terje Solsvik and Rod Nickel)
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