Equity Strategies Group-Level Analysis Of The Equity Markets
Select Industries Leaned Into Growth Last Year
Select Industries looks much different than it did one year ago, with exposure to growth-oriented groups increasing, while commodity- and defensive holdings have been declining. This shift benefited performance throughout the last twelve months.
Finding Winners Outside The “Mag-7”
Select Industries has been successful at finding leading industry groups outside the handful of stocks driving the S&P 500 over the last year. Homebuilding, Semiconductor Equipment, and Trading Companies & Distributors have all been key contributors to the strategy.
Leuthold Portfolios Update - December 2023
At the start of a new year, we look back at the sector shifts that transpired throughout 2023—mainly going from commodity and defensives to start 2023—to growth and cyclicals as we begin 2024.
Leuthold’s Industry Group “Dreams” And “Nightmares”—Annual Update
Over the entire history of this study, the momentum plays of our “Dreams” and “Nightmares” have worked both ways. This was not the case in 2023, however, as the fortunes for both groups (based on 2022 performance) U-turned in a considerable way.
Leuthold Portfolios Update - November 2023
The portfolio is allocated among various style categories—maintaining diversification—yet still taking concentrated positions in our favorite industry groups.
Select Industries Plays Defense
Health Care Equipment and Health Care Supplies were both downgraded to Unattractive this month. Weight-loss drugs have generated most of the negative headlines in the space, but we’ve also observed slow and steady deterioration in top- and bottom-line growth.
Select Industries Moves Back Into Energy
Oil & Gas Equipment & Services was purchased for the Select Industries portfolio last month, re-establishing exposure to what was our largest overweight entering 2023. The sector leapt from #11 to #4 in the ranks on the back of improved sentiment and macro readings.
Multi-Year Holdings Key To Select Industries
The GS Scores help Leuthold Select Industries portfolio identify underappreciated themes that can turn into multi-year holdings. Managed Health Care has been a holding for over 13 years, while Semiconductor Equipment (seven years), and Homebuilding (six years) have also been long-term winning positions.
Select Industries Remains Active Within Sectors
The portfolio takes a very active approach within sectors, with almost half of its Consumer Discretionary weight allocated to Homebuilding, while completely avoiding Chemicals within the overweight Materials sector.
Group Selection Scores Remain In Gear
The Group Selection Scores have performed well in the first half of 2023, not an easy feat considering the abrupt style reversal that took place in January. Value and technical indicators are struggling, but the rest of the model is more than picking up the slack.
Select Industries Portfolio Shifts From Commodities To Growth
Exposure to commodities (and defense) has fallen rapidly within Select Industries. The primary beneficiaries of that reduction are growth-oriented groups.
Leuthold Select Industries Portfolio
As an all-cap strategy, Select Industries is currently targeting larger market-cap themes via our “Big” groups from Info Tech, Communication Services, and Health Care.
Leuthold Select Industries Portfolio
A combination of strength from Information Technology with weakness from Energy resulted in the two swapping places in our sector ranks this month.
Leuthold Select Industries Portfolio
Select Industries has overweight positions in Energy, Materials, Consumer Discretionary, and Industrials. The portfolio has no exposure to Consumer Staples, Real Estate, or Utilities.
Rankings At The Top Offer Diversified Mix
Energy remains the top-rated sector, but Information Technology, Communication Services, and Financials follow closely behind. These offer a diverse mix of commodity, growth, and cyclical options.
Rate-Sensitive Groups Dominate Unattractive List
Utilities, Real Estate, and Consumer Staples are the bottom three sectors among the GS Scores.
Leuthold’s Industry “Dreams” And “Nightmares”— Annual Update
We update our annual exercise reviewing how the industry “Dreams” and “Nightmares” of the previous year (2021 in this case) fared in the ensuing year (2022), and conclude with the new year’s industry composition of the Dream and Nightmare portfolios based on 2022 performance.
Sector Rankings
Energy, Health Care, and Information Technology kick-off 2023 at top of our sector scores. Energy and Health Care have resided in the 1st and 2nd spots, respectively, for the last three months. Info Tech moved up from the 6th spot in October to 3rd this month. Consumer Discretionary, Real Estate, and Utilities are the lowest rated for the second consecutive month.
Energy Strength Is Intact; GS Scores Continue To Produce Positive Results
Energy has solidified its spot atop the GS Scores; it’s by far the highest-rated sector and counts three underlying groups among the top-ten industries out of all the sectors. Valuations have only improved amid steady outperformance, and renewed capital discipline looks to remain for the foreseeable future.
Sector Rankings
See this month's sector rankings.