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Understanding Trump is key to your investment strategy: Julius Baer CEO

Markets have been moving to the beat of U.S. President Donald Trump and understanding such a correlation is key to making money, the chief executive officer of Julius Baer told CNBC on Wednesday.

"That's the area that one needs to understand to the best possible extent (to) devise an investment strategy around it," Boris Collardi, chief executive officer at the Swiss private bank Julius Baer, told CNBC Wednesday.

One particular impact from Trump's protectionist policies has been outflows from emerging markets. However, according to Collardi, such a trend should disappear by 2018.

"We're going to have - in 2017 - the last bit of outflows in emerging markets related to the upcoming 'automatic information exchange' and that should then tail off so that in (2018) the offsets of outflows should diminish or should actually totally disappear," he said.

The automatic information exchange on financial accounts is a new global rule that aims to cut tax evasion. Apart from Switzerland, almost 100 nations, including all major financial centers, have declared their intention to adopt such a rule.


AFP PHOTO | FABRICE COFFRINI

The Swiss private bank reported Wednesday an adjusted net profit of 705.5 million Swiss francs ($712.2 million) for 2016, ahead of the average estimate for 679 million Swiss francs in a Reuters poll.

Net profit under IFRS accounting standards was 619 million francs, up 411 percent on 2015 when the bank's bottom line was hit by provisions for penalties in a U.S. probe into tax evasion by American clients.

Collardi told CNBC that this trend should continue, because the bank has hired a number of "experienced senior bankers."

"Over the last few years the banking sector's ability to increase revenues has been impaired by the low interest rate environment and by the lack of direction in markets of where clients should and could invest. If I look at cash balances we're still at a very high level, so people, while transaction volumes have picked up, are still sitting on a lot of cash," he added.

—Reuters contributed to this report.