In US, Consider a portfolio manager in charge of a $1 billion fund, facing the world...

In US, Consider a portfolio manager in charge of a $1 billion fund, facing the world as it stands on 10/14/2020. The fund is a large-cap, equity only fund that invests in value and growth stocks. The purpose of the fund is to earn excess returns while staying in a relatively low risk part of the market (big companies). What two sectors do you think will outperform over the next three to five years and why? What two sectors will underperform and why? See Appendix A for a list of sectors and examples of the industries in the sector.

Sector	Example Industries
Communication Services	Diversified Telecommunication Services Entertainment Interactive Media & Services Media Wireless Telecom
Consumer Discretionary	Automobiles Hotels, Restaurants, & Leisure Household Durables Leisure Products Textiles, Apparel, & Luxury Goods
Consumer Staples	Beverages Food Products Household Products Personal Products
Energy	Energy Equipment & Services Oil, Gas, & Consumable Fuels
Financials	Banks Consumer Finance Diversified Financial Services
Health Care	Biotechnology Health Care Equipment & Supplies Health Care Technology Pharmaceuticals
Industrials	Aerospace & Defense Airlines Building Products Machinery Marine Professional Services Road & Rail
Information Technology	Communications Equipment IT Services Semiconductors Technology Hardware, Storage, & Peripherals
Materials	Chemicals Construction Materials Metals & Mining
Real Estate	Equity REITs Real Estate Management & Development
Utilities	Electric Gas Water

Expert Solution

Sectors that are expected to outperform are Industrial, Health care and communication Services

Industrial- This is because increase in budget allocation towards defence equipments and space and technology.

Communication Services- This is because of AI, Machine Learning , automation and 5g growing trends

Health casre industry - This is because of during and Post covid demand of health care products such as immunity products, Vaccination. Pro Heath aware population

Sectors taht are expected to underperform are as follows

Real Estate- Demographics are expected to change post covid.

Energy dependency on oil and other fuels will underperform due to change in rules and regulation and more prominently towards climate change. More relaince on renewable energy is expected

jeff jeffy answered 2 years ago

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