Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
Blog Home
Bob Carey
Chief Market Strategist
X •  LinkedIn

  The Best-Performing Sectors Spanning The Past 12 Months, Brexit Fallout & Post-Brexit Fallout
Posted Under: Sectors
Supporting Image for Blog Post


View from the Observation Deck 

  1. Today's blog post is a follow-up to the one we did on 7/21/16 (click here to view). This version features the United Kingdom's (U.K.) Brexit vote held on 6/23/16. U.K. citizens voted to leave the European Union (EU).
  2. The decision to leave the EU resulted in two days (6/24 & 6/27) of very volatile trading in the U.S. The VIX Index, which uses S&P 500 Index options activity to gauge investors' expectations of volatility, spiked from a reading of 17.25 on 6/23/16 to 25.76 on  6/24/16, or a one-day gain of 49.33%, according to Bloomberg. Since the sharp spike on 6/24/16, the index retreated back to 12.86 (8/3/16). The 20-year average for the VIX Index was 21.01 through 8/3/16.
  3. As indicated in the first two total return columns in the chart, the top performing sectors for those periods were Telecommunication Services and Utilities, both of which are considered defensive in nature. This suggests that investors may have been looking to mitigate risk, in our opinion. Both sectors also tend to offer attractive dividend yields relative to the S&P 500 Index, in our opinion.
  4. The third column of total returns, however, shows that the best performing sector following the two volatile trading days was Information Technology. It also shows that investors bought the other sectors that sold-off hard on 6/24/16 and 6/27/16.
  5. Our takeaway is that U.S. equities, in particular, have been able to withstand and recover from a number of recent negative events, such as terrorist attacks, the Brexit vote and a short-lived coup attempt in Turkey.
  6. Despite reaching a new all-time high (2,175.03) in the S&P 500 Index on 7/22/16, many investors have turned away from U.S. stocks. Investors liquidated an estimated net $66.3 billion from U.S. Equity and Sector Equity mutual funds and exchange-traded funds in the first six months of 2016, according to Morningstar.

This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. Investors cannot invest directly in an index. The S&P 500 Index is a capitalization-weighted index comprised of 500 stocks used to measure large-cap U.S. stock market performance, while the 10 major S&P 500 Sector Indices are capitalization-weighted and comprised of S&P 500 constituents representing a specific sector.

To Download a PDF of this post, please click here.

Posted on Thursday, August 4, 2016 @ 1:43 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email

Utilities Looking A Bit Rich After Staging Strong Rally In 2016
Expected Earnings and Future Profitability
Foreign Sales Dipped For The Big Multinational Companies In 2015
Consumer Stocks Have Outperformed The Broader Market Over The Past 10 Years
The Best-Performing Sectors Since 5/21/15, 8/25/15 and 2/11/16
The Search For Yield In the Bond Market
Stocks at All-Time Highs But It's Just Second Hand News
Health Care Stocks Are Mending Slowly
A Snapshot Of S&P 500 Index Dividend Increases In The Current Bull Market
S&P 500 Index Stock Prices Relative To Their 52-Week Highs
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.