Bruce Love, Managing Editor, FA-IQ
“Krishna, in terms of equity markets and looking at the economic policies over the next 18 months or so, are there any sector plays, or are there any sectors people should be looking at?”
Krishna Memani, CIO, OppenheimerFunds
"Yes, there are a couple of sectors that I think are quite attractive, irrespective of the trajectory of growth, if you will. So, financials is one of them. I think financials, irrespective of what you think interest rates are going to do, the likelihood that financial regulation remain as tight as they are today over the next two, three, five years, is probably small and, as a result, a lot of capital will be released to these banks to do things for their shareholders.
“So, I believe profitability for the finance sector is improving. The performance of the sector because of all the things that they can do with new-found capital I think is going to be improving, as well.
“In addition to finance, I think biotechnology is a sector that we like a lot from a long-term perspective. The valuations in the sector are quite low, relatively speaking, relative to their potential growth. And the new discoveries, if you can find them in certain companies, the payoff of that is quite significant. So biotechnology is a very interesting sector for us.”
"Rocco, are there any sector plays or any other equities considerations that you’re thinking of at the moment?”
Rocco Papandrea, Senior Vice President-Wealth Management, Merrill Lynch
"Yes, aside from financials and biotech, as Krishna just mentioned, we’re also interested in the consumer cyclicals right now. If the economy does expand and so forth, the consumer will be hopefully spending more, which will be a positive in that respect.
“We’ve also from a macro standpoint have been shifting from growth to value. We think that in this type of an environment that value has also offered a better opportunity moving forward, since growth has had such a big move, if we take a look at the prior year. And as well on the international side, we’re starting to increase our weightings there, as well. So that’s also where we’re having a bias in our portfolios.”
"AJ, what are your thoughts on equities?”
Anupam Johri, Executive Director, Wealth Advisor, Morgan Stanley Wealth Management
"If we are looking for sectors, I agree with Krishna, I think financials is a great sector. It has already outperformed a lot of other sectors. And the second one that I would say is energy and I think both of these have to do with deregulation. We are kind of unshackling these things. I mean, the financial sector has been shackled for many years. We need regulations, but I think at some point we got over-regulated.
“So those are the two sectors that I would mention. And then, as Rocco had said, I think that the European markets, they are lagging two, three, four years behind us, so they are in terms of the fiscal and monetary policy, they are we were three, four years ago, and so I think they have got quite a bit of room to run here and they are coming up. So that’s another place that we have to pay attention to.”
"Gentlemen, thank you very much.”
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