Why we’re shifting to utilities and consumer staples


The Island Light Sector rotation portfolio was updated at the beginning of September as part of our regular rebalancing process.   

Given recent and expected future market volatility, we reduced allocations from cyclical to defensive sectors.

We expect that the utilities and consumer staples sectors will benefit from lowered expectations of a Federal Reserve interest rate increase and reduced materials costs for domestic utilities.

 

consumer staples                                                              

 

Technology

For the month, we reduced allocations to financials and consumer discretionary items and retained positions in technology and healthcare.  

We have no current allocation to the energy, materials and industrials sectors.

 

Performance

The following table reflects the performance of our strategy, the S&P and the 9 sector ETFs that comprise our investment universe, through August 31, 2015:

 

Performance

Source: Island Light Capital

 

 

Photo Credit: Stefano Mortellaro via Flickr Creative Commons

Author profile

Matthew Pierce
Matthew Pierce
Island Light Capital Corporation is an investment advisory and consulting firm that specializes in the development of optimally diversified investment portfolios. Enlightened Investing ™ synthesizes state-of-the-art quantitative investment technology, institutional expertise, disciplined investment processes and intelligent security selection. Our products offer globally diversified target risk portfolios that range from Income to Growth. Via proven methodologies, Enlightened Investing ™ assures our clients will stay on the cutting-edge of innovation while taking comfort in a disciplined process that seeks to maximize returns for any given level of risk.


Matthew V. Pierce, founder and portfolio manager, has more than 20 years of investment experience with some of the most innovative institutional investment advisors in the country.