Here’s what portfolio managers at an $813 billion investment giant changed after Trump won

President-elect Donald Trump’s win defied many expectations.

For some investors, that meant making a few tweaks to their portfolios, since the consensus forecast and polling did not actualize.

At a press briefing on Thursday, some portfolio managers at T. Rowe Price, which oversees $813 billion in assets, shared what they changed after Trump’s victory.

“I have been reducing my exposure to Mexico into the first quarter of next year,” said Samy Muaddi, a portfolio manager in the fixed income division.

That was because Trump said he would renegotiate the North American Free Trade Agreement, or NAFTA, which was signed in the mid-1990s and removed some barriers to trade. Trump tentatively plans to focus on renegotiating or withdrawing from NAFTA in his first 200 days in office, according to a memo CNN obtained.

“Should that actually come on the agenda, it would take a very long time to sort out the details,” Muaddi said. “And typically, in a period of such uncertainty, you can see further underperformance of assets.”

The Mexican peso plunged in the week after Trump was elected, as traders contemplated tighter trade and immigration policies under him. It had already been sliding before the election amid financial trouble at the state-owned oil giant Pemex, and stagnant industrial production.

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“We’ve been selling Mexico and buying Brazil,” said Christopher Alderson, the firm’s head of international equity.

“We think Brazil has been unduly punished on the back of this,” he said. “We think there should have been more of a differential between the two of those.” The Brazilian real and its stock market sold off after Trump’s election.

Larry Puglia, portfolio manager for the blue chip growth fund, said he added to a small but already growing position in defence stocks. It was clear that defence spending would increase under President-elect Trump, Puglia said.

For Quentin Fitzsimmons, who co-manages the global aggregate bond strategy, one reaction to Trump’s win was to become more defensive in the bond market by buying more German Bunds. They were a “classic go-to,” he said.

“The great thing is to be in a position where you can defend your high-quality ideas,” he said.

To this end, Puglia, who had an overweight position in financial stocks, bought even more in the sector. The financial sector of the S&P 500 surged post-election on bets that the interest banks earn for lending would rise, tax rates would fall, and some or all of the Dodd-Frank Wall Street reform law could be weakened or repealed.

“We think the regulatory backdrop will improve, and a steepening yield curve that is already occurring should be quite helpful to earnings growth in financial companies,” Puglia said.

Alderson, however, was more cautious on European financials.

With some of the upcoming elections across the continent, and after the painful lesson of Brexit, “you don’t want to be holding a financial in an environment where a currency might be coming out of euro,” he said.

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