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How to Take Advantage of the Great (Sector) Rotation

By: ETFdb
By Russ Koesterich, CFA, iShares Global Chief Investment Strategist One beneficiary of the 2013 US stock market rally: defensive sectors. Until recently, classic defensive sectors like utilities, healthcare and consumer staples outperformed as investors were just starting to dip their toes back into stocks focused on those parts of the market many considered safer and less volatile. But, as I wrote in my latest weekly commentary, over the past few weeks there has been some evidence that this is starting to change [see The Cheapest ETF for Every Investment Objective]. Utilities are down sharply in May, while healthcare and consumer staples companies are also shifting toward weaker performance. At the same time, we’ve seen better performance from energy, industrial, materials and technology firms, all of which are more cyclical in nature. In other words, the real Great Rotation may just be a shift to cyclical from defensive sectors rather than a move to stocks from bonds. [...] Click here to read the original article on ETFdb.com. Related Posts: Companies Increase Dividends: ETFs To Play Daily ETF Roundup: IEO Jumps After Pioneer Natural Resources Earnings, IYW Pops Thursday’s ETF Chart To Watch: IYE Nears Resistance Ahead Of XOM Earnings Big Oil, Commodities And Large-Cap Earnings On Tap: IYE, MOO, XLB Daily ETF Roundup: Stocks Drop On Disappointing Labor Data
By Russ Koesterich, CFA, iShares Global Chief Investment Strategist One beneficiary of the 2013 US stock market rally: defensive sectors. Until recently, classic defensive sectors like utilities, healthcare and consumer staples outperformed as investors were just starting to dip their toes back into stocks focused on those parts of the market many considered safer and less volatile. But, as I wrote in my latest weekly commentary, over the past few weeks there has been some evidence that this is starting to change [see The Cheapest ETF for Every Investment Objective].  Utilities are down sharply in May, while healthcare and consumer staples companies are also shifting toward weaker performance. At the same time, we’ve seen better performance from energy, industrial, materials and technology firms, all of which are more cyclical in nature. In other words, the real Great Rotation may just be a shift to cyclical from defensive sectors rather than a move to stocks from bonds. [...]

Click here to read the original article on ETFdb.com.

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