Political populism is constraining investment returns

What do the success of Donald Trump and Bernie Sanders in the US Presidential campaign, the close Brexit vote on Britain’s membership of the European Union and the Australian election have in common? They all signal some shift towards populism and support for more left-wing policies in the electorate. If this trend flows through to actual policy making it’s another reason to expect constrained medium term investment returns. It’s hard to know how far the populist shift to the left will go regarding actual economic policies. But the risk over time is that a more left-leaning electorate will mean a tendency towards faster growth in government spending; bigger than otherwise budget deficits; more regulation; higher effective top marginal tax rates; less globalisation; and tougher rules on immigration in some countries. Or it may just mean a stalling in economic reforms. Read the latest Oliver's Insights to find out what the rise of political populism means for investors. (VIEW LINK)