The election of a Democratic US president will boost investors’ US equity portfolios from what they would have earned under a Republican if historical evidence continues to hold true, according to E*Trade Financial, the online share dealing firm.

On average, stock returns under a Democratic president are 6 per cent higher than during a Republican one.

E*Trade's claim is drawn from annualised monthly returns on the S&P 500 Index between 1928 and 2008, a period spanning the Great Depression, world war, 1970s stagflation, the 1990s dotcom boom and the 9/11 terrorist attacks on the US.

The coincidence of stronger equity returns with Democratic presidents may be no more than a fluke rather a cause-and-effect factor, however. In the second term of US president Bill Clinton, for example, the Republicans controlled both houses of Congress, forcing the White House to go along with more free market policies than Mr Clinton may have originally wanted.

Also, economic policies that develop under a different party typically take time to affect equity market performance, so an occupant of the White House can take credit or get blamed for actions of a predecessor.

The median annualized return experienced under all administrations was 14.5 per cent; with Republican Presidents, the return was 11.4 per cent, and under Democratic Presidents: 17.3 per cent.

E*Trade said the willingness of the new president to support fiscal and monetary stimulus measures should bode well for equities.

"The fact that President Obama is supportive of an aggressive stimulus to help mitigate the economic downdraft, together with his expressed desire to draw together all Americans to face the economic challenge as one, provides hope that the markets, which react to sentiment and not just hard numbers, may provide the foundation to follow the growth trend set by previous Democratic Administrations,” said Alex Orban, vice president of E*Trade Securities in the UK.