Monday, September 30, 2013

Market Sector Update

The regular season for Major League Baseball concluded this weekend – with the exception of the Tampa Bay/Texas tie breaker tonight- and congratulations to those teams who performed well enough to be participating in the post season.  With 162 games in the books, the statistics for the 2013 season are being tallied for the various offensive and defensive performance categories.  We thought that this may spell a good point to stop and take a look under the surface of the equity markets to determine some performance numbers as well – in this case, by market sector.

Let’s look at the performance of some of the sectors for the most recent one month period.  The Consumer Discretionary sector is leading the pack with a 5.31% trailing one month return, followed by the Telecommunications sector with a 4.38% return and the Industrials close behind at 4.24% for the most recent one month period.  

The worst performing sector over this most recent one month period is Basic Materials with an -8.05% trailing one month return.  As an aside, the Utilities group has only returned 0.86% over the same time period after being the leading performer up until the summer.  Will Utilities shine again with a new rush for yield? Only time will tell.

Obtaining a quick view of how the various equity sectors have been performing throughout the month has recently become very easy by simply checking out the ETFG Heatmap  By going to the ETFG Heatmap, you can easily see both the performance and the Quant information for all 10 equity sectors. We calculate the trailing 1 month return each day for all ETPs, aggregate them into various buckets by their respective Asset Class, Region and Sector.  As with most heatmaps, you can quickly see the relative difference between sectors by the color and shades of the cells (squares).  The key for the ETFG Heatmap is located at the bottom of the page

In looking forward for these sectors, currently, the ETF Global® Quant model favors the Basic Materials sector and specifically the energy and metals/mining industries with
XOP garnering the top ranked spot and XME ranked number four.  Perhaps this may spell a turnaround for this sector?  Again only time will tell, but keep an eye on the ETFGsm Quant model for early signs of strength.

Thank you for reading ETFG Daily Perspectives.

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