Tactical Portfolio Update – European Sectors
European investors shift their sector preferences
In May the STOXX 600 Index fell -0.96%. Is 2011 once again a year that approves the phrase “Sell in May and go away”? Having a look at the sector performances you can clearly see a beginning sector rotation as market participants believe that the economy is moving from late expansion to early contraction. Usually basic materials and energy stocks perform best in late expansion and consumer staple stocks best in early contraction. Exactly this situation appeared in May. The Automobiles and Parts Index was the worst performing with a loss of -3.83% in May 2011. If investors believe in a recovery, the contrarian pick with the ComStage ETF STOXX Europe 600 Automobiles & Parts (LU0378435043) would be the best choice. Best performing sector with a performance of +6.47% in May 2011 was the STOXX 600 Health Care Index. If you believe in an ongoing trend, the db x-trackers STOXX Europe 600 Health Care ETF (LU0292103222) would be your best pick. .
Sebastian Stahn, is Partner responsible for Market Reserach and Investment Strategy at ETF Radar. You can reach him directly under sebastianstahn [at] etfradar.com