Last night’s victory for maverick Republican candidate Donald Trump in the US presidential election is likely to herald an era of heightened political risk internationally, but there are still reasons why the market’s worst fears may not materialise, investment managers say.

Dominic Rossi, global CIO equities at Fidelity International, said: “We are heading into a world of unprecedented political risk that calls into question the pillars of the post-World War II settlement.”

It is no surprise, therefore, that investors are now heading for cover, he said.

“The immediate sense of bewilderment at the shift rightwards in American politics will need to give way to a more sober risk assessment,” he said.

Saker Nusseibeh, chief executive at Hermes, said the assumption was that Trump would listen to advice from professionals in the US State Department when dealing with foreign affairs, even though on the campaign trail he showed a clear willingness to dismiss professional advice.

“Once again, it is not a stretch to imagine Trump in talking to his home constituency might alienate the traditionally supportive Gulf nations with his Islamophobic comments,” he said.

This might in turn strengthen Iran’s influence in the region, which could threaten regional stability and therefore the oil price, he said.

“Likewise, Trump’s anti-NATO and pro-Vladimir Putin comments could be taken, if repeated when he is in power, as a green light by the Russian president to intensify its revanchist foreign policy in Eastern Europe,” he said.

This, according to Nusseibeh, could lead to rising risk premia for European assets.

The biggest risk, according to Neuberger Berman president and equities CIO Joe Amato and the firm’s multi-asset class CIO Erik Knutzen, is that Trump tries to turn some of the more populist rhetoric of his campaign into reality. 

“Whoever emerged victorious,” they said, “the forces that have led to the rise of the likes of Trump, Sanders, Farage in the UK, Le Pen in France and Wilders in the Netherlands are not going away – and partisan shouting matches, assaults on free trade, an interventionist approach to unsustainable industries and a disregard for the financial robustness of the US are not viable solutions.”

They added: “The result could be a tug of war between the deflationary forces associated with lower economic activity and the inflationary forces from higher trade barriers.”

There are now likely to be more votes against the establishment in upcoming elections and referendums taking place across Europe, according to Martin Gilbert, chief executive of Aberdeen Asset Management.

Markets will settle down in time, however, and this is a time for a calm head when looking at markets, he said.

“Trump will not become president until January and between now and then it will become clearer what a Trump presidency will look like. 

“His acceptance speech was inclusive and will hopefully help allay some investor fears,” Gilbert said.

But David Bertocchi, head of global equities at Barings, said the surprise Trump win marked a rare occasion in politics where uncertainty was now likely to increase rather than fall post-election. 

“For the United States, such a situation is unprecedented,” he said.

“Trump’s contentious and anti-establishment campaign has frayed political alliances, which will make it difficult to muster the congressional support needed to advance his policy proposals for a more protectionist and isolationist US.”

David Lloyd, head of institutional fixed income portfolio management at M&G Investments, noted that many commentators had argued that Russia and China’s assertiveness on the world stage had been caused by – or at least coincided with – the US withdrawing somewhat under president Barack Obama, from its previous foreign policy stance of projecting US power and influence around the world.

“So, a further move towards an isolationist US – perhaps reflected in less-than-convincing commitment to NATO obligations, or a scaling back of US overseas troop deployments – may actually embolden leaderships elsewhere,” he warned.