Momentum takes a beating, Value remains near highs
So it is true: what goes up quickly, can also come down quickly! The month of March has seen US momentum stocks fall sharply, while in contrast value stocks have held up very well.
Figure 1 shows that momentum stocks (the line in black) have hardly outperformed value stocks (the line in yellow) over the last half-year, after a torrid month of March.
1. MOMENTUM STOCKS TAKE A HIT, VALUE HOLDS UP WELL
Source: Bloomberg
Three sub-sectors in particular have been hard-hit (Figure 2):
- Biotech has lost 13% from its high at in February (line in yellow);
- Social media stocks such as Facebook and Twitter have lost 14% in aggregate from their peak (line in green);
- Recent IPOs retreat 6% from the peak, judging by the First Trust US IPO ETF (FPX; line in black).
Yield back in vogue
Long-term government bonds have performed well of late. Both European and US long-term government bond funds have gained significant ground over the year-to-date. This, in spite of the poor yields being offered by both (2.1% for a UK Gilt ETF; 3.1% for a US 20+ year Treasury bond ETF).
We can see that yield is becoming very popular once again as an investing strategy; this is evident from the recent performance of both US high yield corporate bonds (in black) and also US real estate trusts (REITs; in orange)...
To read the rest of this article, please click on the Mindful Money link below:
Happy value hunting!
Edmund
Thanks blog author for giving this information which is useful for people top trade in Indian stock market.Blog author writes very well content on this blog profitable for readers
ReplyDeleteBest stock tips provider in india
Thank you!
ReplyDeleteThe rupee fell by nine paise to end at 60.17 against the dollar in yesterday's trade following month-end demand from importers for the American currency.
ReplyDeleteCurrency tips