BlackRock says investors haven't fully priced in the structural changes brought about by the pandemicand pinpoints 2 areas of the market that can still run for years

<p><img src="https://static1.businessinsider.com/image/5ff4863b3793140019e285ca-910/GettyImages-1173177460.jpg" border="0" alt="Traders and financial professionals work on the floor of the New York Stock Exchange" data-mce-source="Drew Angerer/Getty Images" data-mce-caption="Traders and financial professionals work on the floor of the New York Stock Exchange" data-link="https://www.gettyimages.co.uk/detail/news-photo/traders-and-financial-professionals-work-on-the-floor-of-news-photo/1173177460'adppopup=true"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>It is fair to say that all individuals across the world have in some way, shape, or form, experienced the abrupt changes induced by the pandemic.&nbsp;</p><p>Not all repercussions are negative though; COVID certainly helped step on the accelerator that begat permanent structural changes, as years' worth of<a href="https://www.businessinsider.com/investing-advice-portfolio-allocation-for-2021-market-environment-jon-maier-2021-2"> disruption</a> were crunched down to just a few months.</p><p><a href="https://www.businessinsider.com/enterprise-tech-execs-effects-of-covid-19-company-industry-world-2020-4#scott-farquhar-co-ceo-of-atlassian-every-knowledge-worker-just-got-a-crash-course-in-collaboration-tools-1">Digital transformation</a>, health care spending in emerging markets, and an increase in sustainability focus are some of the most prominent structural changes that BlackRock identified as emergent throughout the pandemic.&nbsp;</p><p>Back in November, healthcare and technology stocks boosted their index's performance as the S&amp;P 500 performed at its strongest since April. But there were some like the legendary investor <a href="https://www.businessinsider.com/stock-market-bubble-crash-tech-stocks-bitcoin-overextended-jim-rogers-2021-1">Jim Rogers</a> who believed bubbles were forming in the marketespecially in tech.</p><p>This isn't a concern for BlackRock. Jean Boivin, head of the BlackRock Investment Institute, believes these structural changes and their durability potential haven't completely been reflected in the markets. And he says they could further support the technology and healthcare sectors that already provide investors with high free-cash-flow yields and returns on equity.</p><p>"History suggests financial markets are imperfect at pricing in long-term trends, even when these shiftssuch as demographic changesare expected long in advance," he wrote in a Feb. 8 note.&nbsp;</p><p>The digitization process that many companies had to undergo to reduce costs and enable people to work remotely isn't likely to fade away. And, although the number of teleworking people will diminish as the economy reopens, more employees are going to be working from home than in pre-pandemic times, he wrote.&nbsp;</p><p>Many seem to agree with Boivin's views. In fact, a July 2020&nbsp;Harvard Business School <a href="https://hbswk.hbs.edu/item/what-jobs-are-being-done-at-home-during-the-covid-19-crisis-evidence-from-firm-level-surveys">survey</a> by a team including Alexander Bartik and Zoe Cullen showed that at least 16% of employees will continue working from home after COVID tapers off. The 1,800-person survey also showed that more than one-third of businesses that shifted to teleworking believe it will remain a common practice for many years.&nbsp;</p><p>These transformations support two sectors in particular: <strong>tech</strong> and <strong>healthcare</strong>.</p><p>In tech, Boivin views software, cloud, and security infrastructure companies that help people work remotely as positive for the future.</p><p>As for <strong>healthcare</strong>, its "relatively" low valuations are appealing to Boivin.&nbsp;</p><p>This industry also has room for further gains, and the drivers behind those include demographic shifts, emerging market healthcare spending growth, and innovation.&nbsp;</p><p>The need for accommodating health-related services in a pandemic pushed forward the expansion of telemedicine. And given its cost and operational efficiency, this trend will likely stay present in a post-pandemic world.&nbsp;</p><p>Elsewhere in the sector, the American managed-healthcare industry or health insurance companies could benefit from an Obamacare expansion, and an economic reopening led by vaccine rollout will probably help lift some punished areas, such as elective surgeries and cancer care, Boivin said.&nbsp;</p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/investing-advice-portfolio-allocation-for-2021-market-environment-jon-maier-2021-2" >An ex-Merrill Lynch ETF maven shares how to construct a portfolio that's perfect for today's market landscapeincluding 4 must-have sectors for sustainable returns</a></strong></p><p><a href="https://www.businessinsider.com/stock-market-outlook-blackrock-investing-advice-covid-pandemic-shifts-sectors-2021-2#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/what-its-like-travel-during-coronavirus-outbreak-planes-airports-virus-2020-3">Here's what it's like to travel during the coronavirus outbreak</a></p>
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