The new federal tax plan will stimulate the economy and broaden opportunities to invest in equities and bonds, according to a panel of women portfolio managers who spoke in Manhattan on Tuesday.
“We expect continued economic growth, which should fuel healthy consumer and corporate confidence, supporting continued investment spending in people, business and technology,” said Yana Barton, vice president and co-portfolio manager of the Eaton Vance Focused Growth Fund in Boston.
Barton spoke at a breakfast conference called "Perspectives from Women Portfolio Managers and Outlook for Equities, Bonds and the Economy," along with Maria Fiori Ramirez, chairwoman of MFR Securities, and Anne Walsh, chief investment officer of fixed income at Guggenheim Partners.
“As a growth manager, I look for strong ... earnings growth stories, which we’re finding among technology and select consumer discretionary stocks, industrials and some health care,” Barton told Financial Advisor. “The range of investment opportunities is broad with cyclical and secular forces at play, leading to strong breadth in leadership, counter to the environment we experienced last year.”
Walsh recommended stepping away from Treasuries because rates are rising across the yield curve.
The yield on the benchmark 10-year Treasury note surged to 2.7 percent on Monday, the highest since April 2014.
“Municipal bonds will continue to be very attractive for individual investors, particularly those in the high-tax states due to the deductions now available, while fundamentals are very strong for corporate issuers,” Walsh told Financial Advisor. “They are going to pay less in taxes and will pass the benefit on to shareholders, keeping more money which will help corporate credit strength.”
Like Barton, Ramirez is betting on consumers and corporations having more disposable income to spend, which she expects will strengthen the economy for a longer period of time.
“We’ll see a very healthy increase in capital spending over the next 12 months in manufacturing [and] aerospace, and it's going to spin off dividends for advisors and investors,” she said.
Ramirez also marveled at the possibilities in mergers and acquisitions.