How do I reduce my exposure to the US?

Important information - the value of investments and the income from them can go down as well as up, so you may get back less than you invest.

Q: How do I reduce my exposure to the US?

A: Donald Trump is making investors nervous. The US stock market has fallen by 10% since it peaked on 19 February and traders attribute the decline largely to the American President’s policies, especially the new import tariffs that he announced on Wednesday. If you fear for the effects on the world’s largest economy and want to keep Wall Street out of your investment portfolio, here are some options.

UK funds

An obvious solution would be to invest in British shares. Setting aside its investment merits, putting your money into the London market would at least eliminate any risk connected with exchange rates, which should always be borne in mind when you invest overseas. Although some analysts expected Mr Trump’s tariffs to support the dollar, the opposite has been the case so far and falls in the greenback have exacerbated Wall Street declines for British savers.

Fidelity’s Select 50 list of recommended funds, chosen by independent analysts, includes five funds that invest exclusively in Britain. Two – the iShares Core FTSE 100 UCITS ETF (exchange-traded fund) and Vanguard FTSE 250 UCITS ETF – are trackers, which simply aim to replicate the performance of the relevant stock market index. The other three – Fidelity Special Situations, Martin Currie UK Equity Income and Liontrust UK Growth – are actively managed by professional stock pickers. 

European funds

Funds that invest across Europe give you more geographical diversification but still avoid exposure to America. There are three in the Select 50: Barings Europe Select, Schroder European Recovery and Vanguard FTSE Developed Europe ex UK UCITS ETF. The first two are actively managed, the last is a tracker.

Asia and emerging market funds

The Select 50 has six funds to offer here, one of them a tracker and the rest active. The iShares Core MSCI EM IMI UCITS ETF is the tracker; the active funds are Fidelity Asian Smaller Companies, Fidelity Responsible Emerging Markets Equity, Lazard Emerging Markets, Stewart Investors Asia Pacific Leaders and the Schroder Oriental Income investment trust.

Japan funds

Our list of recommended funds includes three that invest in Japan: one tracker and two active funds. The iShares Core MSCI Japan IMI UCITS ETF is the tracker while Baillie Gifford Japanese and the Schroder Japan investment trust are the active funds.

Global funds

You may want to blend the above regional funds to achieve a well-diversified non-US portfolio. Alternatively, if you are happy with some exposure to Wall Street, the Select 50 includes seven global funds; the following are those with around half or less of their money in America: Dodge & Cox Worldwide Global Stock (52%), Schroder Global Recovery (31%) and Fidelity Global Dividend (30%).

How much of your portfolio is invested in America?

If you want to find out how much of your investment portfolio is currently in American stocks, our Portfolio X-Ray tool can help. It will tell you where your money is invested by the type of asset and the geography. It offers a useful snapshot of your portfolio make-up, helping you to work out if you’re more heavily invested in certain areas than you would like. To use the tool, log in to your account and click on ‘account holdings report’ via a tab within the account summary page.

• Login to your account

Got a burning question you want to ask? Why not drop us a line. Click here to ask your question.