The shock of Trump's duties has passed, Fidelity believes. Which stocks is he betting on?

Stock markets have already weathered the worst of US President Donald Trump's duty rhetoric, and mid-cap stocks now look particularly attractive, according to Fidelity portfolio manager George Efstathopoulos. He sees this market segment as beneficiaries of changing economic trends.

«Худшие из шоков уже позади — вместе с «Днем освобождения», — приводит Bloomberg

Now, mid-cap companies from Japan, Germany and China occupy about 11% of the Fidelity Growth and Income Fund's portfolio - that's one of Efstathopoulos' main bets. A year and a half ago there were almost no such securities in his portfolio. The manager began increasing the proportion of Chinese and Japanese securities in the second half of 2024, and German mid-cap companies were added to the portfolio in March 2025 - shortly after the country's authorities announced an unprecedented budget stimulus package.

In the words of portfolio manager Fidelity, the German market is benefiting from a shift toward active fiscal policy. Japan has begun a unique period of «healthy inflation» and it is mid-sized companies that are benefiting the most from rising domestic consumption. Fidelity's bet on China is explained by the expectation of continued fiscal stimulus and limited risks: the stability of the Chinese market is ensured by state funds, which buy back declining stocks.

An additional plus is the high valuation differential: midcap stocks today are noticeably cheaper than blue chip stocks, notes Trustnet. By June 2025, the MSCI World Mid Cap Index has added 54% over the past five years, lagging the benchmark of large-cap stocks by 26.4 percentage points.

So far, Efstathopoulos' strategy is working, Bloomberg notes: since April 2, the MSCI Japan Mid Cap index is up 4%, Germany's DAX Mid-Cap is up nearly 6%, and China's MSCI China Mid Cap is up 0.5%.

Fidelity is now focused on stocks of mid-cap, foreign trade-sensitive and low valuation companies, said a publication on fintech platform AInvest's website. Fidelity's recent bets on industrials, semiconductors and engineering reflect confidence that these sectors - the hardest hit by trade war shocks - can now grow faster than the market, allowing them to recoup losses.

There are opportunities for investors not only in Europe and Asia, but also in the U.S. market for mid-cap stocks. The most attractive ones are opening up in undervalued sectors whose prices reflect expectations of an escalating trade war, writes AInvest:

- Clothing and textiles. The trade war has driven up apparel prices in the U.S. by 17%, hitting retailers and manufacturers. Relaxing duties could lower prices, stimulate demand and restore margins. Potential beneficiaries are lingerie maker Hanesbrands and PVH (owns Calvin Klein and Tommy Hilfiger brands) with low P/Es.

- Auto parts. The duties increased the cost of new vehicles by $4,000, which reduced demand for midsize suppliers such as Lear and BorgWarner. The elimination of automobile duties could spur a rebound in sales and a revaluation of the stock.

- Minerals and semiconductors. White House-initiated investigations into mineral and chip imports have already disrupted the supply chain. Companies such as Albemarle (lithium) and KLA (semiconductors) could see an increase in demand if duties are lifted.

Mid-sized companies operating in trade-sensitive sectors are now markedly undervalued - their shares are 30-40% cheaper than the average over the past 10 years, stresses AInvest. The discount reflects investors' fears of a prolonged trade war - but that risk is now diminishing.