AB Asset Management "Focus on Industrials and Healthcare in US Stock Market This Year"

Rapid Growth Expected in U.S. Healthcare and Industrial Sectors
Focus Shifts from Technology to Diverse Industries

AB Asset Management expects profits in the healthcare and industrial sectors to grow rapidly in the U.S. stock market this year. It analyzed that the concentration on the technology sector, which led the stock market rise last year, is likely to ease.

Lee Jae-wook, Senior Portfolio Manager at AB Asset Management, stated at the '2025 Global Stock and Bond Market Outlook' briefing held on the 23rd in Yeouido, Seoul, "Based on this year's sector-specific market expectations, the profit growth rate is 20% for industrials and 21% for healthcare." This is similar to the technology sector's projected growth rate of 22%.

Lee explained, "Many consumer goods and healthcare stocks were overlooked in the U.S. stock market last year despite solid performance," adding, "Historically, the healthcare sector has shown a rebound after reaching a low point in its weighting within the S&P 500."

He also said, "Even if the global economy slows down this year, the U.S. market's earnings per share (EPS) growth rate is expected to reach 15%," and added, "The EPS growth forecasts for the Eurozone, developed countries, and Japan this year are around 8-12%."

Highlighting the severe imbalance in U.S. power supply, he identified the energy sector, including electricity, as a promising theme. Lee analyzed, "The U.S. energy-related infrastructure is aging," and "Energy consumption is surging due to the expansion of AI-related data centers." He added, "If the power supply imbalance is resolved, various companies could benefit."

AB Asset Management also provided an outlook on the bond market. Yoo Jae-heung, Senior Portfolio Manager, said, "U.S. BBB-rated bonds offer yields similar to BB-rated bonds," adding, "This provides diversification opportunities for investing in high-yield bonds."

He advised, "While investment demand in the U.S. bond market remains strong, net supply is relatively limited," and noted, "The fundamentals of U.S. companies issuing bonds are also positive factors."

Yoo predicted, "The Federal Reserve's pace of interest rate cuts may slow down," but added, "The easing stance is likely to continue."

He urged, "A strategy of holding high-yield bonds to collect interest remains effective."