New York (HedgeCo.NET) This coming Friday will mark the middle of the second quarter and the performances of some sectors have changed dramatically compared to the first quarter. At HedgeCo Vest during the first quarter, the healthcare sector (especially the biotech sub-sector) was the hottest sector by far.
The ten sector SPDR ETFs reflected the performances with the Healthcare Select Sector SPDR (NYSE: XLV) recording a gain of 6.32% while the Consumer Discretionary Select Sector SPDR (NYSE: XLY) was the second best performing sector with a gain of 4.79%. The two worst performing sectors in the first quarter were utilities and financials. The Utilities Select Sector SPDR (NYSE: XLU) lost 5.17% and the Financial Select Sector SPDR (NYSE: XLF) lost 2.14%.
| Sector (ETF) | First Quarter Performance |
|---|---|
| Healthcare (XLV) | 6.32% |
| Consumer Discretionary (XLY) | 4.79% |
| Telecom (XTL) | 1.37% |
| Consumer Staples (XLP) | 1.13% |
| Materials (XLB) | 0.79% |
| Technology (XLK) | 0.63% |
| Industrials (XLI) | -0.98% |
| Energy (XLE) | -1.33% |
| Financials (XLF) | -2.14% |
| Utilities (XLU) | -5.17% |
The HedgeCoVest composite model performance table also shows changes within the rankings from the first quarter to the second quarter. In the first quarter, not surprisingly it was the two biotech-related models that led the way with the Index Long-Only model coming in third. The Energy and Utilities Long-Only model was the worst performing model, but if you look at what the two sectors did in the first quarter it is understandable.
| HedgeCoVest Sector Model | First Quarter Performance |
|---|---|
| HedgeCoVest Biotech Long-only | 22.93% |
| HedgeCoVest Biotech Long/Short | 17.86% |
| HedgeCoVest Index Long-only | 5.75% |
| HedgeCoVest Basic Materials Long/Short | 2.51% |
| HedgeCoVest Basic Materials Short-only | 2.21% |
| HedgeCoVest Technology Long-only | 1.96% |
| HedgeCoVest Technology Long/Short | 1.65% |
| HedgeCoVest Financials Short-only | 1.19% |
| HedgeCoVest Industrial Long-only | 0.89% |
| HedgeCoVest Index Short-only | -0.68% |
| HedgeCoVest REITS Long/Short | -2.09% |
| HedgeCoVest Energy and Utilities Long/Short | -2.26% |
| HedgeCoVest Industrial Short-only | -2.43% |
| HedgeCoVest Energy and Utilities Long-only | -4.10% |
The momentum has shifted for several models thus far in the second quarter. The Energy and Utilities Long-only model has gone from the worst performing model to the top performing model. The REITS Long/Short has gone from the fourth worst performing model to the second best performing model.
| HedgeCoVest Sector Model | QTD Performance as of 5/8/15 |
|---|---|
| HedgeCoVest Energy and Utilities Long-only | 10.23% |
| HedgeCoVest REITS Long/Short | 3.18% |
| HedgeCoVest Technology Long-only | 2.88% |
| HedgeCoVest Technology Long/Short | 2.00% |
| HedgeCoVest Energy and Utilities Long/Short | 1.17% |
| HedgeCoVest Index Long-only | 0.07% |
| HedgeCoVest Biotech Long/Short | -0.10% |
| HedgeCoVest Biotech Long-only | -0.24% |
| HedgeCoVest Industrial Short-only | -1.21% |
| HedgeCoVest Index Short-only | -1.65% |
| HedgeCoVest Financials Short-only | -2.24% |
| HedgeCoVest Industrial Long-only | -3.53% |
| HedgeCoVest Basic Materials Long/Short | -6.32% |
| HedgeCoVest Basic Materials Short-only | -7.78% |
There is still a month and a half to go before the end of the second quarter, but so far the second quarter has shown that a major sector rotation may be at hand as we head in to the summer months.
Rick Pendergraft
Research Analyst
HedgeCoVest
