Name: Markets looking past geopolitical risks: Portfolio Manager
Uploaded: 2026-01-19T08:10:08.699Z
Duration: 5 min 37 s
Description: Nathan Thooft, CIO and Senior Portfolio Manager at Manulife Investment Management, says that global markets are taking the impact of geopolitical risks in stride, and maintains a positive growth outlook overall.

Nathan Thooft, CIO and Senior Portfolio Manager at Manulife Investment Management, says that global markets are taking the impact of geopolitical risks in stride, and maintains a positive growth outlook overall.

Wall Street

A portfolio manager interviewed by CNBC stated that financial markets have become accustomed to constant geopolitical risks, with investors focusing more on positive economic fundamentals and ongoing monetary and fiscal support worldwide. The manager noted that while political rhetoric, such as recent developments involving Venezuela, Greenland, and the Trump administration, can drive short-term volatility, the actual impact on global GDP and company operations is often limited.

The discussion highlighted that markets typically look past sensational headlines, as policy implementations tend to be less severe than initial rhetoric suggests. While episodes of market volatility are anticipated, these are generally viewed as buying opportunities, with the expectation that underlying growth trends and accommodative policies will continue to support risk assets.

Markets looking past geopolitical risks: Portfolio Manager

Are you running on the premise that as long as it doesn't derail the growth outlook as well as earnings outlook that you are keeping your cool head or does it affect your portfolio construction? We are definitely trying to do that. I mean the reality is the market is becoming accustomed to this right the customs of this dynamic that we have an ongoing constant barrage of different geopolitical risk dynamics and and the markets seem to be taking it in stride for the most part and to your point though I think a lot of it is predicated on the basis that if you look at the underlying fundamentals that are driving the market they still remain pretty positive. We have some big secular themes and trends across the globe that are still powering underlying earnings growth and we still have massive levels of monetary accommodation and fiscal accommodation across the globe that are providing very good backdrops for growth. And I think it's also some takeaways that we can get from these rhetorics that we're getting from the Trump administration. So for example we're talking about we're previewing the Davos Forum this year and looking back about a year ago remember JD Vance's sort of you Europe shakedown at the Munich Security Conference. And I mean the defense sector in Europe for example if you bought in then you still had a good run up. I mean right. So there are some market takeaways from these lines and interesting geopolitical moves as well. So what are the ones that you're paying attention to. Well I think what matters is we got to look at it in stride. The reality is we hear these risks and we hear these headlines but oftentimes we realize that there is this dynamic that it's not as bad as the commentary suggested is. And I'll just use tariffs as an example right. The rhetoric around tariffs a little over a year ago is very very high. The implementation wasn't as bad as expected. And so I do think you have to sit back and think about the fact that despite some of the uncertainties being driven by some of the policy dynamics from the Trump administration the implementation is less problematic and the Trump administration is still very pro-market at the end of the day. They want the markets to be higher just as most other countries want markets to be higher. So typically implementation isn't quite as bad as the rhetoric might suggest. And the the taste of 2026 that we've got so far looking at Venezuela and Greenland related developments and lines coming out of the Trump administration. I wonder how much of your portfolio is is directly or smells of war trays. It's very limited I would say. Unfortunately regardless of how significant the humanitarian and geopolitical dynamics are some of these underlying countries don't really drive much of GDP growth. I mean Venezuela as an example is a very low percentage of global GDP as is Greenland. But the political sensitivities are quite high right. In some cases the humanitarian aspects are also quite high. But when it comes to raw impact to growth it is a fairly limited dynamic. And when we think about our portfolio dynamics the challenge is it's really a sentiment driven type of dynamic. Markets move because of concerns over geopolitics. But rarely are they sustainable. And so this is what we typically see that the markets ultimately look past this because they know it doesn't have a lot of direct impact to GDP or the direct impact to a lot of the companies when it comes to day to day activity. Marty comment on this. Hey Nathan good to see you again especially in person on set in our Hong Kong bureau with Sherry. So listen I got to ask you right. Greenland threatened tariffs on the EU. Is this going to just end up being yet another taco trade. The president almost chickens out at the end of the day or another way to look at it is look is this just another leaf out of the art of the deal. Right. You start with the sky right. You scare everybody and then you end up at the tree line. And we're not so bad. I think history serves as a precedence here. I do think if you look at the history of these types of announcements and you look at the implementation of them there does teams tend to be this dynamic where the rhetoric is a lot louder than the actual implementation. And so I do think you have to think through that. And I think the markets know that. I mean if you look at the futures activity today or even the Asia markets this morning they're not trading off by a significant amount in any way shape or form. That's because the markets know that what we talk about versus what actually happens is often quite different. All right. So in other words we're basically saying is when Davos starts on Wednesday it's going to end up being you know I guess an entertaining reality show to watch. But basically at the end of the day only only that literally just entertainment because look businesses and markets are basically just going to carry on as businesses and markets are basically just going to carry on as normal. They are. But we should expect some higher volatility. Right. We are going to have an ongoing uncertainty when it comes to geopolitical risk. And so the reality is just like we saw last year there will be episodes of volatility in the market and there will be up and downs in the market. We saw a massive correction early last year. We saw a sell off in the October time frame last year. So we do anticipate this year while we have an overall positive view on risk assets globally we do expect episodes where the markets will pull back but we view them as buying opportunities because we ultimately think implementation of policy will be less bad than the ready routes which is just it to be.

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