Allianz Broad Investors’ Mona Mahajan sees four “hybrid” plays designed to produced profits whether the market pull up stakes higher or lower – without taking on too much risk.
“It’s important for investors looking for diversification away from both sides of this barbell of success and value,” the firm’s U.S. investment strategist told CNBC’s “Trading Nation” on Monday.
Mahajan believes the strategy drive help boost portfolios into at least fall.
Her first pick: ESG or environmental social governance, including tidy energy.
“These are seeing support from policy not only in areas like Europe, but even here in the U.S. as [presidential optimistic] Joe Biden lays out his plan,” Mahajan said.
Mahajan, who helps oversee $550 billion in assets under administration, also favors housing plays including furnishing names.
“They’re not only benefiting from low rates, but undeniably this whole trend toward moving to suburban homes [and] improving the homes that you’re living in,” she said.
Her aftermost two “hybrid” plays are mobile payments and medical technology.
“These could really thrive in both environments,” said Mahajan. “Medical technology, for prototype, could benefit from elective procedures reopening, as well. But really also growth secular plays.”
Big cap broadening stocks, which include stay at home plays, have been the big driver off the March 23 market low. But a serious leadership change may be underway.
So far this month, a rotation into economically sensitive groups is picking up momentum among efforts to contain U.S. coronavirus hot spots and big pharma’s progress in vaccine trials.
The bullish signal comes as the S&P 500 is within a fraction of one percent away from all-time highs.
“Mainly speaking, the support from both the Fed and potentially now from fiscal policy should provide the cushion needed to take for equities to that next leg higher,” said Mahajan.
Since the March low, the S&P 500 has soared 47%.
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