AJ Bell Investments has reported today that it has enhanced diversification across its funds and Model Portfolio Service (MPS) with new US sector allocations as part of its Strategic Asset Allocation 2026.
The group says that this recent allocation aims to benefit from the roll-out of AI in the real economy, and noted that sectors such as Healthcare and Utilities could see improvements to productivity as a result of AI.
Sharing some of the detail on this, James Flintoft, head of investment solutions at AJ Bell, comments:
“As many markets, from the US to Taiwan and Korea, continue to focus heavily on the obvious AI supply chain exposure, we are tilting towards sectors that stand to benefit from the continued roll-out of AI in the real economy.
“2025 brought significant progress in the technology sector from AI implementation, with coding becoming increasingly accessible. These benefits are now being felt across other sectors, where the time taken to process and file paperwork is being significantly reduced.
“In particular, we have identified attractive valuations in US sectors that give exposure to this theme, with the following three ETFs in the Healthcare, Energy and Utilities sectors:
- US Healthcare – Xtrackers MSCI US Health Care ETF
- US Energy – iShares S&P 500 Energy ETF
- US Utilities – iShares S&P 500 Utilities Sector ETF
“Utilities and the Energy sector look set to benefit from rising energy demands globally as the building of AI datacentres continues apace. The Energy sector also gives cyclical exposure at a time when the consensus on global economic growth is too bearish and the oil price is at depressed levels. Rising geopolitical risks and possible supply chain disruption does not look to be well appreciated in Energy sector valuations, nor does the longevity and strategic importance of traditional oil and gas assets.
“Healthcare is another sector that stands to benefit significantly from the implementation of AI, namely by speeding up drug development timelines. Major healthcare companies are starting to report reductions in the time taken to carry out data processing, including regulatory filings and drug testing procedure documents, whilst healthcare providers are moving to better diagnostics and giving more joined-up care to patients.
“Adding these sectors strengthens diversification at a time when market concentration is rising across several regions. This is not necessarily a concern where valuations are still on our side, such as in China and wider emerging markets, however there are better alternatives in key markets such as the US.
“In addition, our position in the equal weighted variant of the S&P 500 has been increased by using the Invesco Equal Weight S&P 500 Swap ETF. We have moved to synthetic exposure here to benefit from withholding tax advantages.
“These adjustments are designed to enhance portfolio robustness, mitigate the effects of market concentration and maintain exposure to structural themes such as AI, without reliance on a specific narrative.”
