The Trump Trade had a few misfires last week, but we imagine it could still merge with a Christmas rally. If we had to find a product to ride the wave, it would be a Russell 2000 ETF. The US small-cap index is the archetype of what's supposed to work under Donald Trump, at least in theory. The cheapest product available in the US is the Vanguard Russell 2000 ETF (0.1% fees). 

Indeed, given the gains already made by US equity markets of late, their high level of valuation and the mechanisms that are being put in place, could other opportunities emerge? Bank of America believes that nobody is putting a dime on international equities or bonds, but that things could change in Q1 2025. Here are three strategies to consider, according to the American bank:

  • Buy US Treasuries if yields reach 5%.
    • The pitch: "the Fed is forced to signal in Q1 its determination to temper inflation expectations by making no rate cuts in 2025. The bond market forces the new government to moderate customs surcharges."
    • Product: iShares 0-3 Month Treasury Bond ETF - USD (0.09% fees), useful for exposure to short-term, fixed-rate U.S. Treasury securities denominated in U.S. dollars.
  • Buy international equities (China, Europe) ahead of Donald Trump's inauguration (scheduled for January 20).
    • The pitch: "China will ease its fiscal policy and the ECB will aggressively cut rates in anticipation of customs surcharges... lower rates, cheaper currencies, lower oil prices mean significant easing of financial conditions in Asia and Europe relative to the US... bearish sentiment will soon approach humiliation buying levels."
    • Product: Vanguard Total International Stock ETF USD (0.07% fees): An ETF that employs an indexing investment approach designed to track the performance of the FTSE Global All Cap ex US Index, a float-adjusted market-capitalization-weighted index designed to measure equity market performance of companies located in developed and emerging markets, excluding the United States.
  • Buy gold (to "fight" inflation. Also works with crypto, according to BofA).
    • The pitch: "secular inflection point of globalization and coming inflection of demographics, plus massive energy needs of AI... gold and crypto-currencies remain the best hedges against secular inflation."
    • Product: iShares MSCI Global Gold Miners ETF - USD (0.39% fees). A classic for exposure to physical gold