Sector Road To Recovery

March 25, 2014

Financials have yet to reach prerecession levels, while health care proved to be solid.

Sectors - Recovery v Recession

  • The financial sector, as represented by the iShares U.S. Financials ETF (IYF | A-95), is the only sector yet to regain its prerecession luster.
  • The Vanguard Consumer Staples ETF (VDC | A-93) and the Consumer Discretionary Select SPDR ETF (XLY | A-91) have been high-flyers as consumer spending has been surprisingly resilient throughout the downturn.
  • Health care was the best sector to own. Not only was it the 2nd-most-resilient sector in the downturn, but it has also gained the most since its peak. Our Analyst Pick for U.S. health care is the iShares U.S. Healthcare ETF (IYH | A-95).
  • Wild card: Recently, deflation has been a bigger concern than inflation. Should that trend reverse, energy and the iShares U.S. Energy ETF (IYE | A-98) stand to benefit from rising commodity prices.

 

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