Materials Are The Best Performing Industry Group Ytd And 3 Other Performance Observations by Eric Bush, CFA – Gavekal Capital Blog

Note data as of the 7/31/2016

#1) Material stocks have been great in 2016. 

Whether you are investing in the developed world or the emerging markets, the best performing area of the stock market so far in 2016 has the been the materials industry group. On an equal-weighted, USD basis, DM materials have returned over 21% and EM materials have done even better returning nearly 33%.

DM Industry Groups

Materials Are The Best Performing Industry Group YTD

EM Industry Groups

Materials Are The Best Performing Industry Group YTD

#2) DM Banks have been crushed except for in North America

By far the worst performing industry group in the developed world have been banks. Banks are down over 18% YTD. However, the have been some regional factors at play. Both DM EMEA and DM Asia bank stocks have fallen into a bear market while DM Americas bank stocks have held in around 0%. In total, DM EMEA banks are down 26% and DM Asia stocks are down 20% in 2016. DM Americas banks are only down 0.48%.

#3) Energy is the only sector that has had a negative return over the past 4 years.

Out of 10 developed world sectors and 10 emerging market sectors, only the energy sector has posted negative returns over the past four years. The DM energy sector is only down 44 bps while the EM energy sector is still down a whopping 20%. It is important to put those dismal returns in context and remember that the best performing sector in the developed world, information technology, is up over 170% during this time. And the best performing sector in the EM, health care, is up over 329%!

DM Sectors

Materials Are The Best Performing Industry Group YTD

EM Sectors

Materials Are The Best Performing Industry Group YTD

#4) 19 out 24 EM countries are positive YTD compared to just 10 out 22 DM countries. 

After several dismal years, EM equities are finally having their moment in the sun once again. 19 out 24 EM countries have positive performance in 2o16 (again this is on an equal-weighted, USD basis). Peru is having the best year so far as it has returned over 64%. Canada and New Zealand are the only two DM countries that crack the top 10 countries so far in 2016.

DM and EM Country Country

Materials Are The Best Performing Industry Group YTD

Materials Are The Best Performing Industry Group YTD