AllianceBernstein remains cautious about the state of the U.S. economy as elevated levels of inflation persist, central banks continue to tighten monetary policies and questions continue to mount about global economic growth. However, the firm also thinks the market provides an opportunity for investors to make contrarian bets, especially in growth stocks and high-yield U.S. debt.
In a research note, the financial institution cut its forecasts for economic growth. At the same time, the firm increased its projections for both inflation and short-term interest rates.
That said, AllianceBernstein did highlight that it believes are opportunities around both growth stocks and high yield fixed income for certain types of investors.
“Within growth stocks, their year-to-date selloff represents not only a more attractive entry point, but also a timely opportunity to rebalance into them, where appropriate,” the firm said.
"With all the bad news that’s out there, this may be creating a contrarian but good opportunity for investors who have intermediate time horizons," AllianceBernstein argued. "In times when consumer sentiment has reached its lowest levels, we have historically seen attractive forward returns for both one-year, and three-year periods."
AllianceBernstein didn't suggest any particular growth stocks. However, for investors interested in the group, they can consider the following growth-based exchange traded funds.
Growth ETFs: ( NYSEARCA: VUG ), ( NASDAQ: QQQ ), ( IWF ), ( VGT ), ( NYSEARCA: XLK ), ( SCHG ), ( SPYG ), ( VBK ), and ( IWO ).
In another potentially attractive area, AllianceBernstein trained its spotlight on US high yield bonds. Here are some funds that offer potential exposure in this area.
High Yield ETFs: ( NYSEARCA: HYG ), ( USHY ), ( JNK ), ( SHYG ), ( HYLB ), ( SJNK ), and ( ANGL ).
For greater details, see the full investment note that was created by AllianceBernstein.
For further details see:
AllianceBernstein sees opportunities in growth stocks and high-yield U.S. debt