Taking a contrarian view, Breidert added, “Conventional energy equities could be a decent winner under Biden. By any measure, the energy investment space has had a difficult run the past four years. The reason for that has been simply too much capital chasing too much growth and killing prices and returns for everyone. It is likely under a Biden regime that the economically destructive measures Trump has implemented, such as relaxing methane flaring and shortening lead times on permitting drilling, will be reversed.”
Health care also will feel the impact of a Biden presidency, Jarzebowski said. “The health-care sector is the only long-term, viable solution to the pandemic,” but investments in the sector are trading at steep discounts now because of the uncertainty created by elections every four years, he said.
“Look at the Affordable Care Act and drug pricing,” he said. “On the ACA, the two sides are polar opposites. On drug pricing there is bipartisan agreement. And at the same time, if there is an expansion of Medicare, it will be good for the health-care sector.”
Although sectors react differently, “advisors should think about ESG investing holistically, across all asset classes in the portfolio,” Jarzebowski said. “It should not be just one little piece of the pie. We are starting to see changing consumer preferences. ESG investments are not just for equities; they should be fully integrated into the portfolio.
“There will be massive innovations in products that at least do not harm, and may improve, the environment and society, and in how these products are made and how they are recycled. Companies are being asked daily by investors and shareholders what they are doing to improve the community and they need to have a good story to tell,” he said.
Investors will have the help of new ratings organizations that will continue to grow alongside the ESG market. There is not enough data out there yet for investors, but “it is coming and it is coming quickly,” Rivlin added. Not only the energy sector, but manufacturing and commercial sectors will be affected by an increased emphasis on ESG issues and the growing amount of data that will be available.