|As we get past the largest US election of all time, markets are positive, up 9% since elections, and up 16% year to date. In this edition, we look at the top industries and sectors that have shaped our economy and our lives over the past year and are expected to continue to be key areas of growth for the future. Our top picks are the Technology, Healthcare, and Consumer Discretionary sectors – Section 2, below.
Please join me on Wednesday, November 18th for our next Market Update on Investing for the next 4 years. The Zoom link is below.
One special sub-sector that we have been watching, and expect to make further moves, is Renewable Electricity Producers. This segment has returned 11% over the past year and is projected to see upward momentum.
The Oil and Gas industry has been hit hard over the past year with COVID and reduced driving. While oil has rebounded since then, demand is not expected to get back to prior levels even post-pandemic. Furthermore, the next few years might very well see additional environmental regulations against the expansion of drilling activities.
Oil majors such as BP have recently been announcing an emphasis on Clean energy initiatives. As a desire for environmentally friendly energy solutions picks up, Clean energy might very well get spun into its own sector in the future!
And finally, in the Stock Spotlight section, we take a look at an Exchange Traded Fund (ETF) – ticker symbol TAN – in the Renewable Energy space. We expect this segment to keep making strides in the next four years.
-Toni DasGupta Ph.D., MBA, Investment Advisor
Veda Financial @ TD Ameritrade
|PLEASE JOIN US FOR OUR WEBINAR
Market Update: Investing for the Next Four Years!
Wednesday, November 18, 2020, 5:00 pm – 5:30 pm
Zoom ID: 875 0923 7868 Pass: 2020 https://tinyurl.com/yy9c3t2x
|Section II: Best Sectors for 2021 and Beyond:
|These are three sectors that have performed well over the past year and are expected to continue to do see momentum in the future
Top Sector: Information Technology 1 yr return = 43%
Subsector: Technology Hardware and Peripherals, 1 yr return = 76%,
The Driver: Technology and the Economy are inextricably linked at this point. Technological innovation is expected to continue to create prosperity and to shape our lives for the foreseeable future.
Key Trends: The Hardware and Peripherals sub-sector is expected to outperform in the near future. With the pandemic and work-from-home, people are buying laptops and networking equipment at an elevated rate. Businesses as well as homes are moving heavily towards Cloud storage.
Top Sector: Healthcare 1 yr return = 18%
Subsector: Life Sciences Tools & Services, 1 yr return: 52%, Biotechnology = 11%
The Driver: With the pandemic, Biotechnology has become a key focus area for the development of vaccines and therapies. The race is on and is expected to continue as governments and companies collaborate to deliver effective options amid large demand.
Key Trends: People living longer and want to lead healthier, active, and productive lives. Healthcare is recession-resistant – people will always need access to healthcare regardless of the economy.
Top Sector: Consumer Discretionary: 1 yr return = 31%
Subsector: Internet & Direct Marketing Retail 1 yr return = 70%, Household Durables = 17%
The Driver: At the beginning of the pandemic, Consumer Staples saw a big boost with a high demand for food and household essentials. Looking forward we expect to see larger gains in the Consumer Discretionary sector which includes Internet Retail, Household Durable Goods, and Apparel & Luxury Goods sub-sectors.
Key Trends: More people are working from home and spending on home office improvements. Shopping on the internet has not only become a necessity due to social distancing, it has actually become a source of entertainment as other recreational options remain limited.
Bottom Line: It is important to realize that the fortunes of Industries and Sectors can change quickly depending upon the economic, geopolitical, and other factors. It is advisable to be positioned for balanced growth in the longer term and to not be highly concentrated in one or two areas of the market.
|If you have any questions on building a sector portfolio,
email us at [email protected]
|Section III: Stock Spotlight
|Stock Spotlight: TAN SOLAR ETF 1 year growth = +171%
TAN, an ETF from Invesco, invests primarily in the solar power industry through stocks of solar power companies, and also in Depository Receipts. Assets stand at $1.80 billion and it tracks the MAC Global Solar Energy Index. The ETF is up 171% over the past year, with further room to grow in the new economy.
The graph below shows the 1-year price history of TAN (green and red line) compared to the broader market represented by the S&P Index (yellow line) up 13%.
|(Legal disclaimer: Veda Financial portfolios might hold positions in the above sectors & stocks)
If you missed our October Market Update on COVID, the Economy, and the Upcoming elections – you can access the video recording here https://youtu.be/a5nRbXFtjBI
|© 2020 Veda Financial
|DISCLOSURES: The information contained herein is provided for informational purposes only, and not to be construed as investment advice. It is not complete, and does not contain certain material information about the investment, including important disclosures relating to the risks, fees, expenses, liquidity restrictions, and other terms of investing, and is subject to change without notice. Investment is subject to a variety of risks. The information contained herein does not take into account the particular investment objective or financial or other circumstances of any individual investor. Before making an investment decision, investors are advised to review the Explanatory Memorandum and other related subscription documents and to consult with their tax, financial, and legal advisors.
|Copyright © 2020 Veda Financial, All rights reserved.
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