Seeking additional balance
Investors are facing prospects for an uneven recovery potentially featuring run-ups in cyclical markets (i.e., value) and questions around the sustainability of growth that may lead to further gains for higher-quality stocks. As such, a portfolio’s core should reflect these two distinct style traits, creating additional balance that allows for more specific positioning elsewhere for potential cyclical changes (banks, value, small-cap) and secular changes (broad innovation, clean energy, and intelligent infrastructure).
Originally published by State Street Global Advisors, 12/4/20
1 “Covid-19: Pandemic Shatters More Records in U.S., as States and Cities Tighten Restrictions”, New York Times, 11/15/2020
2 “U.S. Recovery More Tenuous as Jobless Claims Rise, Incomes Fall”, Bloomberg, 11/25/2020
3 Based on the total return for the MSCI ACWI IMI Index and the Bloomberg Barclays US Aggregate Bond Index
4 The S&P Banking Select Industry Index has a 0.55 correlation to the US 10-year yield from 11/30/2015 to 11/30/2020
5 Bloomberg Finance L.P. as of 11/30/2020, based on calculations by SPDR Americas Research
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