Resilient and profitable performers will excel in the era of deglobalisation
James Harries, co-manager, STS Global Income & Growth Trust, selects his favourite stocks as he shares where he'd put his money


The global economy is witnessing what might be described as a “reverse Berlin Wall” moment. For over a generation, asset owners have benefited from powerful structural tailwinds following the collapse of the Iron Curtain. The integration of Eastern Europe and, later, China into the global economy expanded the global labour pool, reduced production costs, and suppressed inflation.
This shift, supported by the US-led international order (the Pax Americana), enabled governments to enjoy a peace dividend and greater fiscal flexibility. It also drove a long-term decline in interest rates and allowed the implementation of unconventional monetary policy, such as quantitative easing after the global financial crisis – further benefiting asset prices.
While this may have been desirable from an economic point of view (optimising the ability of economies to pursue their comparative advantage and companies their cost base), it has created imbalances and societal pressures. These strains have helped fuel populism and economic nationalism.
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The rise of president Donald Trump was emblematic of this shift, as his administration challenged long-standing norms across geopolitics, economics, and currency policy. Key areas of disruption include a weakening of traditional alliances such as Nato and a turn away from globalisation toward protectionism and tariffs.
Although some proposed tariffs have been rolled back, the global trend toward deglobalisation and economic fragmentation remains intact. At the same time, stock market valuations, particularly in the US, remain elevated. This backdrop calls for a measured and cautious investment approach.
The aim of the STS Global Income & Growth Trust is to deliver good risk-adjusted returns over the full market cycle. We focus on resilient, cash-generative businesses with predictable earnings and strong balance sheets. This helps us preserve capital during volatile periods while providing consistent and growing income. Here are three examples.
Profiting from red tape
Paychex (Nasdaq: PAYX) is a US-based leader in payroll, human resources and insurance services for small and medium-sized businesses. As regulation becomes more complex, demand for outsourced solutions is rising, which gives this firm ample scope for growth both in the US and overseas. The group also benefits from higher interest rates as it earns interest on money held for clients. With limited capital requirements and high recurring revenues, Paychex supports strong and growing dividends. It is an excellent long-term global income investment.
CME Group (Nasdaq: CME), the owner of the Chicago Mercantile Exchange, benefits directly from increased market volatility; the growing use of futures and options to manage risk in portfolios; and the ongoing rise in the size of the US Treasury market. Its control of key derivatives contracts and deep liquidity pools create formidable competitive advantages, making it uniquely positioned in today’s uncertain world.
A global leader in travel technology, Amadeus IT Group (Madrid: AMS) offers mission-critical IT services and a booking platform that connects airlines, hotels, and travel agents. Its dominant market position is protected by network effects and high switching costs. The business is volume-driven rather than price-sensitive, and we believe the shares are undervalued relative to US-listed peers.
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James Harries is the Senior Fund Manager responsible for the Trojan Global Income Strategy. He has over 20 years of investment experience and has managed global equity portfolios since 2002. James is the manager of the Trojan Global Income Fund, co-manager of the Trojan Ethical Global Income Fund and was awarded management of STS Global Income & Growth Trust in November 2020.
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