The U.S. elections have heightened uncertainty. What is the Fidelity portfolio manager betting on?

A fund manager at Fidelity International took advantage of the decline in tech stocks—driven by concerns over the results of the U.S. midterm congressional elections—to increase his exposure to the sector and add Indian assets to the portfolio, according to Bloomberg.

George Efstathopoulos, who manages approximately $3 billion in Fidelity International’s growth and income funds, said he is reducing defensive positions—including those in the utilities sector—to buy technology stocks in Asia and other regions. At the same time, he is increasing his exposure to the Indian market to diversify his portfolio.

According to Efstathopoulos, the midterm elections have heightened uncertainty and widened “the gap between market valuations and fundamentals.” One of the funds he manages, the Fidelity Funds — Global Multi Asset Growth & Income Fund, has risen by about 9% since the beginning of the year and ranks in the 80th percentile among comparable funds, according to Bloomberg.

"In the technology sector, I like memory manufacturers and stocks from the Nasdaq index. Major cloud providers are posting strong financial results, the memory chip production cycle continues to show positive momentum, and valuations are attractive,” Efstatopoulos noted.

His approach aligns with that of investors who remain optimistic about the earnings of AI companies, despite concerns about capital expenditures. Investors are seeking refuge in markets such as India’s, which is relatively sheltered from industry-wide turmoil, Bloomberg notes.

The Democrats’ victory, which gave them a majority in both houses of Congress, initially triggered a sell-off in global markets. Investors believed that such an outcome would complicate the implementation of U.S. President Donald Trump’s agenda, according to Bloomberg. Overnight, S&P 500 futures fell 1.4% and Nasdaq 100 futures dropped 2.4%, but they then fully recovered their losses and turned higher. Shortly before the opening of the main trading session, Nasdaq 100 futures were up 0.4%, S&P 500 futures were up 1.1%, and Dow Jones futures were up 2.1%.

This isn’t the first time a Fidelity portfolio manager has bet on technology: Efstatopoulos had previously cited undervalued mid-cap stocks in Asia as attractive, viewing market pullbacks as buying opportunities. Fidelity portfolio managers applied a similar logic in March, when a sell-off in Asia—amid military escalation surrounding Iran—sent Samsung Electronics and SK Hynix shares tumbling: At that time, Fidelity also viewed the decline as an opportunity to increase its positions in chipmakers, separating geopolitical risks from the fundamental metrics of the AI sector.

This article was AI-translated and verified by a human editor