Sector Analysis and Sector Selection within Equity Markets

Top Papers on Equity Sector Analysis and Sector Selection

Sector selection plays an important role in the performance of equity portfolios and S&P Dow Jones Indices has two papers with analysis on this topic in the below list - one on the contribution of sector returns to S&P 500 performance, and another one on sector rotation strategies in the Australian equity market. 

Below we list the top recent buyside research on sector analysis and sector selection. A number of papers offer a refresher on the changes to the GICS classification system, while Winton presents some unique alternative classification systems for equities. 

Sector Effects in the S&P 500® (S&P Dow Jones Indices, 2019)

In this paper, the authors assess the relative contribution of sectors in determining overall S&P 500 performance.

Fidelity Analyst Survey 2019 (Fidelity Intl blog, Mar 2019)

For compliance reasons, this paper is only accessible in the UK & Europe

The 'sector by sector' portion of the Fidelity Analyst Survey looks at sector sentiment and other factors that are relevant to the outlook for specific equity sectors in 2019.

Sectors that Outperform in Yield Curve Inversion (UPFINA blog, Mar 2019)

This blog post attempts to shed light on the sectors that outperform (and underperform) during periods of U.S. treasury yield curve inversion.

Industry Top Trends 2019 (S&P Global Ratings)

This incredibly detailed document (323 pages) from S&P Global Ratings contains outlooks on 23 industries, covering all of the industry-specific trends that are relevant for investors in 2019.

Sector Rotation

Defensive Versus Cyclical: The Blurring Lines (PIMCO, 2019)

The lines between defensive and cyclical sectors have recently been blurred, due to recent counter-intuitive declining credit quality in some defensive corporates and improving credit quality in cyclicals.

Crowded Trades: Implications for Sector Rotation and Factor Timing (State Street/MIT, 2018)

Ascertaining a method of locating bubbles and trading out of them before it is too late would be a boon for sector rotation investors. This paper explores the implications of identifying crowded trades.

Rotation Strategies and Their Role in the Australian Market (S&P Dow Jones Indices, 2018)

S&P Dow Jones Indices explores the performance of two sector allocation strategies within the Australian equities market - sector price momentum and cyclical/defensive sector rotation.

GICS

GICS Changes Seem More Evolutionary Than Revolutionary (Axioma blog, Sep 2018)

GICS changes in 2018 may reflect more of an evolutionary transformation than a drastic change. Still, Axioma examines the various risk exposures in the old telecom vs new communications services sector, as well as other differences.

Sectors are Shifting: The Impact of the New GICS Framework (Fidelity Investments, Sep 2018)

For compliance reasons, this paper is only accessible in the United States

The authors highlight the four most significant effects of the recent GICS reclassification for sector-conscious investors.

Systematic Methods for Classifying Equities (Winton, 2018)

Winton looks at two alternatives to the Global Industry Classification Standard - one based on market behavior and another that uses AI to group companies based upon their own descriptions.

Index Sector Composition

European Equity Spotlight (Lyxor ETF, Mar 2019)

For compliance reasons, this paper is only accessible in the UK & Europe

This 44 page document provides a comprehensive overview of the characteristics of European equity indices, including an examination and comparison of sector exposures and country exposures.

US Equity Spotlight (Lyxor ETF, Mar 2019)

For compliance reasons, this paper is only accessible in the UK & Europe

This 28 page document provides a comprehensive overview of the characteristics of U.S. equity indices, including an examination and comparison of sector exposures.