(Low) Beta Domination by Jennifer Thomson, Gavekal Capital Blog
Over the last year, the beta factor explained 84% of movements in the developed world market– a figure that has jumped to 90% (and higher) over the last month:
At this year's SALT New York conference, Jean Hynes, the CEO of Wellington Management, took to the stage to discuss the role of active management in today's investment environment. Hynes succeeded Brendan Swords as the CEO of Wellington at the end of June after nearly 30 years at the firm. Wellington is one of the Read More
Given rising concerns over the Chinese economy, tensions in the Middle East, and the Hermit Kingdom’s (supposed) hydrogen bomb-induced earthquake, it is not surprising to note that it is those stocks with the lowest beta that have outperformed:
Regular readers will note the familiar trend of counter-cyclical groups (like Health Care and Consumer Staples) dominating the overall market and, especially, cyclicals such as the Energy and Materials sectors:
Whether we look at this persistent preference for low beta, defensive names, the generalized malaise in global markets, or the potential for continued M&A in the Health Care sector, any evidence of a tradable change in last year’s trends is (so far) missing in action.