IHS Global Insight's 2009 Sector Rotation Strategy for North America and Europe

Ranking Stock Market Sectors by Their Potential for Investment Return

IHS Global Insight's sector rotation strategy is based upon the company's expertise in macroeconomic, industry, and financial analysis, and is focused on providing fundamental forward-looking metrics for security valuation—such as sector profits, dividends, and free cash flow. These are used to calculate and rank the sectors that have the highest potential for total return in North America, Europe, and worldwide. The sector rotation advisory is part of the World Industry Service Stock Sector Rotation Strategy, which assists asset managers in identifying the most profitable sectors for investment within equity markets.

Stock Market Sectors in North America and Europe with the Strongest Potential in 2009 Continue to be Healthcare and Consumer Staples

Currently, the healthcare and consumer staples sectors have the best potential in the United States and Europe for 2009. Next in attractiveness are telecoms and utilities, albeit more attractive in Europe and Canada than in the United States. The sectors with the worst investment potential are predicted to be financial and consumer discretionary sectors.

How Accurate Were We in 2008?

Here is what IHS Global Insight said in December 2007 about U.S. Sector Rotation Strategy for 2008:

For 2008, the consumer staples and healthcare showed the smallest declines in prices amongst all sectors in the United States; financials and materials showed the worst declines. Overall, the recommendations from 2008 outperformed the U.S. stock market, during a period of extreme volatility and turbulence, by 130 basis points in 2008.

Here is what IHS Global Insight said in December 2007 about EMU Sector Rotation Strategy for 2008:

For 2008, the EMU stock markets in the telecoms and healthcare sectors were in the top-three sectors, registering the smallest declines in 2008; while the financials sector exhibited the worst performance. Overall, the recommendations from last year outperformed the overall market by 465 basis points in the EMU.

Related Material:
Press Release - 5 Jan 2009

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Stock Sector Rotation Strategy: 2009 View for the U.S., Canada, EMU and UK