Question

You are working at Bank of America Merrill Lynch as a Portfolio Manager. You are thinking about rebalancing clients portfolio position and researching on various industries, i.e., housing construction, health care, energy, technology, financials, coal mining, and steel production. Choose one or two industry that you would expect to perform best in future. Write a brief summary and explain why you client would be convinced by your decision.

Answer 1

As a portfoilio manager at Bank of America Merrill Lynch, the amount of money needs to be invested in various sectors for the purpose of diversification. The best two sectors that the I, as a Portfoilio Manager should have invested in is Healthcare and Technology.

Healthcare is one of the biggest profit making industry among all the industries available. The profit margin of heathcare companies are very high after a certain point in time. The main costs involved in healthcare industry is research of various new medicine and vaccine and the cost of manufacturing them is about 1/10 of their selling price. Hence after achieving the breakeven in few years, healthcare companies incurs huge profit. Also these companies provides stable growth over a long period of time owing to the industry characteristics.

Next industry is Technology. Technology companies are performing quite well over the past few years. Recently, Apple, has touched the market capitalisation of 1 trillion dollar, the first company ever to reach such a huge market capitalisation. Also the product launches by tech giants such as Apple and Google are changing people's life and will be in high demand in the coming years. Foe example, Artifical intelligent platform named as Google Assistant is launched by Google and Self driving cars will also soon be launched by Google. Hence, it poses great opportunity for future growth prospects.