Longevity & Obesity Stocks Beating The Market

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Every month, Bank of America Merrill Lynch looks into a few themes that create investment opportunities within a rapidly changing world. The reports offer insight on the following themes: climate change & extreme weather, education, energy efficiency, food security, longevity, millennials, obesity health & wellness, safety & security, waste and water.

The firm benchmarks its thematic Primer Picks (Buy-rated stocks with material exposure) against the MSCI AC World. Since inception, on December 6, 2013, five out of eight themes have outperformed this benchmark.

The Safety & Security theme has had the largest returns, having surged 24.24 percent since inception. Second in line is the Obesity and Health & Wellness theme, up 23.76 percent, followed by the Longevity theme, up 19.10 percent.

In this month’s Theme Watch report, analyst Beijia Ma and her team looked into the Longevity and Obesity themes, which rose 2.86 percent and 1.51 percent over the past month, continuing to “outperform the benchmark MSCI AC World amidst the elevated market volatility.”

The surges were driven by robust performance in biotech and sportswear and equipment companies, for a second month in a row.

On the other hand, Education, Water and Climate Change sold off roughly 4 to 6 percent each, mainly on the back of “continued weakness in cleantech and EMs, particularly China and Brazil.”

However, the experts expect this to revert soon as the market enters what they call a “recovery” phase, a time in which they prefer value, low quality, and high risk. Water, Waste and Food Security themes “have the highest exposure to stocks that should outperform in this phase, the note assures. “Conversely, Obesity and Millennials have the highest proportion of stocks that screen as likely to underperform.”

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Posted In: Analyst ColorLong IdeasAnalyst RatingsTrading IdeasBank of AmericaBeijia MaMerrill Lynch
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