Obama vs. Romney: how the US candidates shape up in key sectors

Healthcare

Henrik Rhenman, Rhenman Healthcare Equity L/S

Preferred winner: Barack Obama

‘Healthcare would be a relative winner if Obama is re-elected. The main reason being that the Affordable Care Act would be implemented fully which would add predictable and profitable growth to most sub-sectors, particularly the pharmaceutical and hospital companies.’

‘If Romney wins, equity markets will rally but after an initial boost, healthcare will likely underperform as general uncertainty about the healthcare market will prevail over pro-business aspects.’

Energy

Tim Hathaway, Brown Advisory US Smaller Companies

Preferred winner: Mitt Romney

‘In terms of Obama v Romney, Obama may not be the best bet to unlock the energy potential. Democrats tend to be very cautious over environmental issues and the ecological impact of the fracking and contamination of ground water issue could see them be reticent to invest in it.’

‘However, the Republicans are much less concerned about the environment and have more concern about growing business – which this area could have a lot of. If Romney gets in then that bodes well for shale gas growth. But the economic stories are certainly more long-term in that area.’

Markets

Joanna Shatney, Schroder ISF US All Cap

Preferred winner: Barack Obama

‘There is a view that the market will sell off significantly if Obama wins but we do not agree with this. We are more inclined to believe that getting the election out of the way is a positive for the market, regardless of the ultimate winner.’

‘In addition, a Republican sweep of Congress and the Presidential race means greater change is likely, which we think will create greater ambiguity for investors to deal with in 2013, driving up equity market risk premium.’

Consumers

Mike Corcell, RWC US Absolute Alpha

Preferred winner: Mitt Romney

‘For the US it would be a massive, massive positive for consumer confidence if Romney won, because it would have huge positive implications for job creation. I think the market is pricing in an Obama win but I don’t think he would offer the market the same confidence Romney would do as well. We would love to position with what we want to happen but we are looking at what the market is doing.’

Fiscal Cliff

Neil Dwane, Industria

Preferred winner: Mitt Romney

‘This is creating real concerns on both sides of the House that the fiscal cliff will be a re-run of August 2011, when we nearly went over the debt ceiling issue. With Congress likely to take the fiscal cliff to the wire at year end, investors should, therefore, be prepared for extraordinary political brinkmanship and any solution is likely to be the minimum they can deliver.’

‘The Republican perspective is that Romney has shown an ability to get deals done and, as a Republican Governor in Democratic Massachusetts, to push through structural reforms like health care reform. They argue strongly that voters should give him a chance because, unlike Obama, he understands the meaning of the word compromise.’