Finland's largest pension fund has reduced its US stocks after questioning the legitimacy of Donald Trump's presidency.

Varma Mutual Pension Insurance Company, a $53billion (45 billion euro) public pension fund has reduced its exposure to stocks, with most of that reduction coming from US stocks.

Varma CEO Risto Murto told Bloomberg News: "It seems as if there is no president in the UK – if I look at what is the moral and practical power, there is no longer traditional president."

Since entering the White House earlier this year, Trump's presidency has quickly become characterised by Twitter outbursts, including recent defence of white nationalist protestors in Charlottesville.

Murto said Trump's apparent inability to work with Congress is particularly worrying, given the global ramifications of decisions made in Washington.

"The lesson from 2008 is that if we have a problem in the US, then we all have a problem," he said, adding that Trump's response to demonstrations in Charlottesville is a "breaking point if you look at how business leaders reacted."

Murto's comments come as investors grow increasingly uncertain about the U.S.'s future economic prospects.

U.S. stock markets shot up to record highs in the months after Trump's election, as investors bet Trump would cut corporate taxes, boosting bottom lines. But that agenda now appears threatened, and the mood in the market is growing more cautious.

Several prominent analysts in the US have stated that the country's economy is showing signs of a downturn ahead.

Analysts at HSBC, Citigroup and Morgan Stanley recently said that the traditional relationships between stock, bond and commodity markets are beginning to break down, a sign of a market correction ahead.

Trump is due to meet with Finland's President Sauli Niinisto for first time meet in the White House on Monday.

First published 31.08.2017

Lindsay.sharman@wilmingtonplc.com