LIVE MARKETS-Investing with U.S. election scenarios in mind

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INVESTING WITH U.S. ELECTION SCENARIOS IN MIND

With more than five weeks to go before the U.S. Presidential election, it's still fairly early days since changes can happen quickly in politics, but Morgan Stanley Wealth Management made some suggestions on how market sectors could perform depending on who ends up in the White House.

Monica Guerra, an executive director and head of US policy at Morgan Stanley Wealth Management, said her group developed two political party equal-weight baskets.

Each basket tracked sectors and industry exchange-traded funds (ETFs) that Guerra sees being in a position to benefit from whether the Democratic party candidate Kamala Harris, or the Republican party candidate, Donald Trump, end up in the White House.

In the case in the event of a Harris victory, Guerra sees Democratic policymaking benefiting clean energy companies such as those involved in electric vehicles (EVs) and solar power, as well as companies in managed care, infrastructure, defense and technology, including cybersecurity and semiconductors.

Areas that they see benefiting most from a Republican win would be traditional energy, master limited partnerships, utilities, materials, real estate, block-chain technology, banks, pharmaceuticals and biotechnology.

Guerra notes that the Republican basket has outperformed the Democratic basket by 10% this year, though she writes that "momentum shifts in the closing weeks of the campaign could create risks for stocks favored by a GOP victory."

(Sinéad Carew)

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