Significant dispersion between the returns of each sector continue to create opportunities for those investing by sector on a 3-6 month basis. While sector investing is proving a favoured means of profiting from the current environment, there are also geographical exposures and smart beta factors that could be used to play our themes.
Most countries have started on the road to recovery, with economies opening and people regaining mobility freedoms. Disappointment may arrive in the form of vaccination supply issues or new COVID variants, but hopefully any letdowns take the form of speed bumps and the direction of travel remains one-way. Our Sector Picks reflect that the themes we adopted last quarter, of reopening and recovery, and the associated rotation of sectors, are largely unchanged.
This quarter, we have extended the Sector Compass to include broader equity flow information, using the same unique data set and insights that we utilise for sector strategy.
Against this backdrop, our Q2 Sector Picks include Financials (World, US), Materials (World, US, Europe), Industrials (World, US, Europe) and Consumer Discretionary (Europe).