As bottom-up, fundamental investors focused on the long-term—three to five years—we tend not to position the portfolio around macro events. At the same time, given the potential for meaningful policy changes under the new U.S. administration, we believe it is important as investors to keep an eye on what is coming out of Washington as it relates to trade, regulation, and taxes.

While it is unclear exactly how the new administration’s trade policy will unfold, rhetoric coming out of Washington suggests the potential for a tougher trade environment for multinational companies.

As long-term, fundamental investors, potential short-term market volatility stemming from U.S. policy changes creates opportunities.

Many multinational companies have benefited from globalization and built supply chains across the globe. To the extent multinationals have a high reliance on foreign sourced inputs, a border adjustment tax could negatively impact profits.

In addition, dramatic changes to trade policy could trigger retaliation by other countries, making it more difficult for larger, multinational companies to conduct business.  Our focus is on understanding the risks and opportunities associated with various policy outcomes for the companies within our large cap universe.

Unlike the trade risks, there is general optimism around deregulation and potential tax policies. It is widely accepted that there will be some degree of deregulation. Many investors believe that the increase in regulations over the last several years negatively impacted economic growth and decreased the ability of both large and small companies to compete globally due to higher compliance costs.

From a tax perspective, it appears likely that U.S. corporate tax rates will become more competitive with the rest of the world. The higher U.S. tax rate historically has led to companies investing in other parts of the world to the detriment of U.S. investment.

Should a lower U.S. corporate tax come to fruition, we believe structurally advantaged companies with unique products and services are more likely to retain the benefit whereas less differentiated businesses are more likely to have it competed away.

While we are keeping a close eye on potential policy changes, we remain focused on the long term and finding high quality growth companies. From our perspective, potential market volatility stemming from these dynamics creates opportunities.

As long-term, large-cap managers, we have the opportunity to take advantage of mispriced stocks within our universe of structurally advantaged companies when the market overreacts to short-term factors.

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Please carefully consider the Funds’ investment objective, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling +1 800 742 7272. Read it carefully before you invest or send money. Investing includes the risk of loss.

Any statements or opinions expressed are those of the author as of the date of publication, are subject to change without notice as economic and markets conditions dictate, and may not reflect the opinions of other investment teams within William Blair Investment Management, LLC or the Investment Management Division of William Blair & Company, L.L.C.

This content is for informational and educational purposes only and not intended as investment advice or a recommendation to buy or sell any security. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions.

Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Investments are subject to market risk. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

William Blair does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax questions and concerns.

Distributed by William Blair & Company, L.L.C., member FINRA/SIPC.

Copyright © 2017 William Blair & Company, L.L.C. "William Blair” is a registered trademark of William Blair & Company, L.L.C. No part of this material may be reproduced in any form, or referred to in any other publication, without express written consent.

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RSS FEED

Please carefully consider the Funds’ investment objective, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling +1 800 742 7272. Read it carefully before you invest or send money. Investing includes the risk of loss.

Any statements or opinions expressed are those of the author as of the date of publication, are subject to change without notice as economic and markets conditions dictate, and may not reflect the opinions of other investment teams within William Blair Investment Management, LLC or the Investment Management Division of William Blair & Company, L.L.C.

This content is for informational and educational purposes only and not intended as investment advice or a recommendation to buy or sell any security. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions.

Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Investments are subject to market risk. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

William Blair does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax questions and concerns.

Distributed by William Blair & Company, L.L.C., member FINRA/SIPC.

Copyright © 2017 William Blair & Company, L.L.C. "William Blair” is a registered trademark of William Blair & Company, L.L.C. No part of this material may be reproduced in any form, or referred to in any other publication, without express written consent.

Statement of Financial Condition | NMS Rule 605 & 606 | Business Continuity Plan | UK Stewardship Code
Cookie Policy | Social Media Disclaimer | Privacy & Security | FINRA’s BrokerCheck

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