Amid a mixed bag of investors in the U.S. market, one portfolio manager remains optimistic and sees reasons to stay invested. “We really like the United States,” Aneka Beneby, a portfolio manager at Julius Baer International, told CNBC Pro last month. “Now that the (U.S.) election results It has become clear that we can reasonably assume higher growth rates in the U.S., which could lead to a year-end rebound.” Her comments come as U.S. stocks have surged so far this year, with the S&P 500 up 27.5% year to date. The S&P 500 and the tech-heavy Nasdaq kicked off the final month of the year, both setting new records and extending gains from November. Experts predict that the index, especially the S&P 500, will rise further. However, some market watchers, such as Morningstar executive Kunal Kapoor, view the U.S. market as “expensive” and are looking for cheaper opportunities with better risk-adjusted returns. Looking forward to 2025, Benibi expects U.S. economic growth to be higher than the previous 2%, reaching around 2.5%. At the same time, she expects inflation to rise to around 3.4% next year, well above the Fed’s 2% target. She added that this would mean the federal funds rate would fall by 4-4.25% by March next year. Currently, the federal funds rate is 4.5-4.75%. Industries to watch Benibi said that given the current outlook, investors should “want to enter the market at this particular point in time.” “We invest for the long term and part of that is staying invested and not trying to get in and out of the market itself because it’s hard to time it,” she said. “Given what’s going on, there are some tactical things you can do,” she explains. In addition to the United States, long-term investors are also eyeing opportunities in multinational companies with diversified revenue sources in various countries. She is particularly bullish on large, high-quality growth companies that “can afford higher interest rates.” “They are profitable, they generate a lot of cash and they have a large cash balance,” Benibi explained. She pointed to the recent performance cycle, noting that earnings growth “expanded” and “that’s encouraging.” “As a result, our view is no longer focused on the Big Seven to drive returns – we are now looking at adding that cyclicality to the portfolio,” she said. The so-called Big Seven stocks, which include the tech giants: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla, have been investor favorites over the past two years. In addition to these companies, Benibi is still bullish on global large-cap technology stocks and sees potential, especially companies in the fields of cloud computing and artificial intelligence. “There’s often a perception that these companies are expensive. We think they’re fairly reasonably valued right now, but far from bubble territory, so we’re still quite optimistic in this space,” she explained. Other themes she is bullish on include industrials and financials. In financials, Benibi is bullish on U.S. banks and expects them to do well amid deregulation, a higher inflationary environment and correspondingly higher yields from President-elect Donald Trump’s administration. —CNBC’s Lisa Kailai Han and Alex Harring contributed reporting
