For investors who bet early on the latest “Trump trade,” the payoff has been eye catching: a 29% gain in roughly six months tied to a basket of assets expected to thrive under President Donald Trump’s policy mix. Now the same strategists who built that trade are telling clients to walk away, arguing that the market’s next phase will reward a very different set of winners. The shift is a reminder that trades built around politics can be lucrative, but they are rarely buy‑and‑forget.
At the center of the call is a view that Trump’s mix of aggressive trade policy, muscular geopolitics and expansive fiscal plans has already been priced into some of the flashiest beneficiaries. The architects of the original trade are rotating out of those high‑beta plays and into more targeted exposure to metals, mining and strategic materials, a pivot that says as much about Washington as it does about Wall Street.
How a 29% ‘Trump trade’ came together
The original idea was straightforward: if U.S. President Donald Trump was going to keep driving headlines on tariffs, defense and spending, then investors should own the assets most directly tied to that agenda. The team behind the strategy highlighted how U.S. President Donald has been a constant market catalyst, influencing everything from the U.S. dollar to U.S. Treasuries as traders tried to front‑run policy moves. Their “Trump trade” bundled that thesis into a curated list of exchange‑traded funds and stocks that could benefit from stronger nominal growth, higher defense outlays and a more confrontational stance toward China.
Over roughly half a year, that basket delivered a 29% return, a performance that easily beat broad equity benchmarks and validated the idea that political cycles can be traded. According to This Trump trade was framed as a way to capture the market’s enthusiasm for pro‑growth policies without having to pick individual winners in Washington’s favor. That success, however, is exactly why its creators now see more risk than reward in staying put.
Why the Ned Davis team is telling clients to dump it
After a run like that, the temptation is to let winners ride, but the Ned Davis team is taking the opposite tack. They argue that the easy money tied to the initial Trump policy shock has already been made and that the risk‑reward profile of the original basket has deteriorated. In their latest update, they stress that the same forces that powered the rally, from aggressive fiscal talk to tariff brinkmanship, could now fuel volatility rather than steady gains, a view that underpins their recommendation to exit the trade and reset positioning with a cleaner slate.
One of the clearest signals of that shift is their decision to jettison some of the most headline‑grabbing holdings. The group has decided to drop the iShares Bitcoin Trust ETF, known by its ticker IBIT, and the ARK Fintech Innovation exposure that had been part of the original construction. In their view, those positions were useful vehicles for capturing speculative enthusiasm around Trump‑era deregulation and risk appetite, but they now look more like sources of downside if policy rhetoric collides with tighter financial conditions or renewed regulatory scrutiny.
Inside the Big MAC playbook for the next phase
Rather than simply going to cash, the strategists are rolling their gains into a new framework built around the political calendar. Their colleague Ed Clissold has built what he calls the Big MAC, short for Midterms Are Coming, an index of trades designed to benefit as the Trump policy agenda collides with the next round of electoral politics. The idea is that markets will start to price not just what the administration is doing now, but how voters and lawmakers will respond as midterm races heat up, shifting the balance of power in Congress and the odds of new legislation.
Within that Big MAC framework, the team is tilting toward sectors that sit at the intersection of Trump’s priorities and bipartisan concern over national security and industrial capacity. Materials and mining are prominent, with the S&P Metals & Mining ETF XME singled out in the original reporting as a beneficiary of this pivot, a detail highlighted in Dow Jones Jan coverage of the strategy. That tilt reflects a belief that, regardless of midterm outcomes, Washington’s appetite for reshoring supply chains and securing critical resources will remain strong.
Rare earths, strategic metals and the new Trump market map
The renewed focus on metals is not just a sector call, it is a geopolitical one. As the United States tries to reduce its dependence on foreign supply chains, especially for components that feed into defense systems and clean‑energy technology, funds tied to strategic resources have surged. One standout has been the VanEck Rare Earth and, listed on NYSEARCA under the ticker REMX, which is up a striking 146% since the market’s bottom in April 2025. That kind of move underscores how quickly capital has flowed into anything perceived as a play on resource security in a more confrontational global environment.
At the same time, there are signs that the most speculative corners of this theme are already cooling. Diversified Rare earth ETFs also pull back after a frenzied rally tied to a Trump‑era trade deal, with leveraged 2X products suffering particularly sharp slides compared with the steadier VanEck Rare Earth and Strategic Metals ETF on the NYSE, REMX. That divergence is a useful cautionary tale for anyone chasing the next Trump‑linked theme: broad policy trends can support an asset class, but leverage and momentum can still turn a winning narrative into a painful drawdown.
Policy, politics and what comes after a 29% win
Behind the sector moves is a deeper policy shift in Washington that extends beyond any single trade. While the administration’s latest actions have created what one report describes as a second state‑backed player in the rare earths space, investors are focused on the confirmation that securing rare earth elements is now a top national priority. That language, captured in a note on While Washington’s policy shift fuels optimism for MP Materials, helps explain why the Ned Davis team is comfortable rotating away from more speculative Trump trades and toward companies and funds that sit at the heart of this strategic push.
For individual investors, the message is not that Trump‑linked trades are over, but that the market’s focus is evolving. The original 29% gain, documented in multiple Provided accounts of the trade, came from being early to a clear policy story. The next phase, shaped by Ed Clissold’s Big MAC and the emphasis on metals and strategic materials, will likely reward those who can distinguish between themes that have already been fully priced and those where Washington’s priorities are only beginning to filter into earnings and valuations. For anyone still holding the original basket, the architects’ own decision to exit is a strong signal that it may be time to lock in gains and rethink how to play the Trump market from here.
That rethink starts with recognizing how quickly the ground can shift when politics drives prices. The same Ned Davis team that built the trade is now effectively telling investors that yesterday’s winners, from IBIT to ARK, no longer offer the best balance of risk and reward in a world where midterms are coming and policy is tilting toward industrial strategy. Their updated playbook, detailed in the This Trump coverage and expanded in the Their discussion of Big MAC, is less about chasing the next 29% in six months and more about aligning portfolios with the durable parts of Trump‑era policy. For investors willing to follow them out of the original trade, the opportunity now lies in that quieter, more strategic rotation.
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*This article was researched with the help of AI, with human editors creating the final content.
Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
