Ask the Manager: Samuel Rines on Navigating Volatility with Quality Growth

Welcome to Ask the Manager, ETF Central's series where we interview top experts, analysts and portfolio managers to dive into the latest investment trends, market updates, and economic insights.

We recently chatted with Samuel Rines, Macro Strategist at WisdomTree, about the real impact of tariffs, the outlook for fiscal policy, and where investors can find opportunity amid the noise.

How effective do you think the current approach of using tariff threats to push trade negotiations is? Could this strategy lose impact over time?

Escalating tariff threats are effective at generating the attention of negotiators. But that is about it. It may reinvigorate ongoing talks, but it does little to generate better outcomes (at least thus far). Overtime, this strategy is likely to result in some countries beginning to “call the bluff”. 

With uncertainty around the big fiscal bill and political tensions rising, what does this mean for government spending and stimulus in the near future?

There will be some sort of bill coming out of Washington. That is a matter of when, not if. Government spending is likely to be relatively contained with the deficit generation coming predominately from the tax cuts. It should be somewhat stimulative from a consumer perspective but likely leads to government spending being less of a tailwind than it has been for the past several years. 

Some data suggests that overall fiscal policy might actually be slowing growth. How do you think markets are interpreting this, especially since stocks have remained relatively strong?

This is going to be a persistent problem. The soft, survey based data is point towards consumers and businesses that are anxious. But the hard data and public company reports point toward a consumer that is relatively sanguine and still spending. Overall, there are certainly pockets of weakness. But the overall economy continues to chug along albeit at a slower pace than last year. 

How important is the debate around tax cuts and extensions, and what impact could changes there have on consumer spending and the economy?

The SALT debate is the one we are focusing on the most. That is a significant stimulus to upper middle income consumers, and it could have a real effect for the economy. 

Given all the back-and-forth on tariffs, taxes, and trade deals, where do you see potential opportunities or risks for investors in the coming months?

The opportunity for investors is using the volatility to their advantage. The noise creates chances to buy high quality companies at reasonable prices that are less effected by tariffs or have plenty of balance sheet space to overcome any policy changes and shifts. 

How does WisdomTree’s U.S. Quality Growth Fund (QGRW) focus on quality growth companies position it differently in today’s market environment compared to traditional growth ETFs?

QGRW’s construction is what sets it apart. By combining a growth factor with a quality factor, companies included in the fund are not simply “growth for the sake of growth” but growing companies that have a higher likelihood of continuing to do so. 

In a market that’s navigating inflation pressures and potential rate hikes, what advantages do you see in QGRW’s strategy for investors seeking growth with quality?

High quality, growing companies are far less sensitive to the whims of the central bank and inflation. Their growth trajectory allows them to outgrow the potential issues associated with inflation – input costs moving up or wage pressures.