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- 01/24/2017

Donald Trump doesn’t understand how hard it will be to get legislation done, fund managers say

Pharma Horizon

Some prominent U.S. fund managers  say they see the broad outlines of the Affordable Care Act remaining intact despite Trump’s signing of an executive order on Friday, his first day in office, that sought to weaken it.
Accordin to  Reuters, as a result, these fund managers are buying shares of hospitals, health insurance companies and biotech firms they see as unfairly hit by political uncertainty. “They may do enough to try to rebrand it as Trumpcare, but I just don’t think it will be that dramatically different from what we have today,” declared Jeff Jonas, a portfolio manager at Gamco Investors.

After Trump was elected on Nov. 8, Healthcare stocks fell swiftly and have underperformed since, on the other side hospital stocks such as HCA Holdings Inc have outperformed  due to Republicans plan to replace the Affordable Care Act at the same time they repeal it. Shares of HCA are up 7.9 percent since the start of the year and are trading slightly higher than they were on Election Day.

Eddie Yoon, portfolio manager of the $6.1 billion Fidelity Select Heath Care fund in Boston remains confident on the medical device and biotech industries because both do not look like they would be significantly affected by any of the Republican healthcare proposals.

He also added that Biotech may also benefit if Congress passes legislation that cuts the taxes companies pay on profits earned overseas. 


Source: Reuters