This Trump trade is an underappreciated opportunity, says Janus Henderson
Financial and energy stocks have jumped since last week’s election, but there’s another area of opportunity that investors could be missing out on, according to Janus Henderson. The market has rallied since President-elect Donald Trump’ s victory, although it took a breather on Tuesday. Investors have been particularly focused on the so-called Trump trade , which includes financials, as well as oil and gas names. The S & P 500 financials sector moved nearly 8% higher over the past week, while energy stocks have gained nearly 5% during that time. However, financial stocks may have “gotten in a bit ahead of themselves,” said Jeremiah Buckley, a portfolio manager at Janus Henderson. Instead, he sees an opportunity in health-care stocks, which should also benefit from a Trump administration, he said in an interview on CNBC’s ” Squawk on the Street .” The sector is up just under 2% over the past week, and is the third-worst performing group in the S & P 500 year to date. “It has been a difficult regulatory environment for health care over the last four years, with price controls on pharmaceuticals, [and] regulations around Medicare and Medicaid,” Buckley explained. “Going forward, the administration could be a little more favorable for the overall industry — and that could be positive.” In addition, there is great research and development happening in health care right now, especially in health-care services, Buckley added. XHS YTD mountain SPDR S & P Health Care Services ETF “There is great innovation. We’ve obviously seen the benefits of GLP-1 s, which have driven substantial growth for pharmaceuticals and companies like Eli Lilly, ” he said. “We think there is additional innovation in cancer and across the board in diabetes, as well as medical devices.” He thinks that health-care services companies will also have improved profit margins over time as utilization trends normalize. Among the funds Buckley oversees at Janus Henderson is the U.S. Dividend Income Fund . UnitedHealth Group , AbbVie and Medtronic are among its top 10 holdings, as of Sept. 30. Gilead Sciences and Amgen also make up more than 2% each of the fund’s assets. Another fund Buckley oversees is the Growth and Income Fund, which includes many of the same health-care names and had 2.7% of its assets in Eli Lilly as of Sept. 30.
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