New York (HedgeCo.Net) – Last Tuesday marked the end of the second quarter and it was a quarter many investors are happy to see go. The market had a hard time getting any traction in either direction and as we pointed out in last week’s newsletter, the S&P has been in a tight range since early April. The two biggest obstacles for the market have been the Fed and their plan to raise interest rates and of course the situation in Greece. With these two items hanging over the market, investors weren’t willing to put more capital to work in equities and that resulted in the tight range.
The S&P 500 took a small loss in the second quarter with the benchmark index down 0.23% for Q2. This put the YTD gain at 0.21% at the half way point in the year. Looking at the Select Sector SPDR ETFs as a gauge for the ten main sectors and we see that four stocks gained ground in the second quarter while four lost ground. On a YTD basis, the numbers are an even split with five sectors moving higher and five moving lower.
|
Sector/ETF |
Q2 Return |
YTD Return |
|---|---|---|
|
Healthcare/XLV |
2.96% |
9.47% |
|
Consumer Discretionary/XLY |
1.82% |
6.70% |
|
Financials/XLF |
1.56% |
-0.62% |
|
Technology/XLK |
0.35% |
0.98% |
|
S&P 500/SPY |
-0.23% |
0.21% |
|
Materials/XLB |
-0.35% |
0.44% |
|
Telecom/XTL |
-1.13% |
0.22% |
|
Consumer Staples/XLP |
-1.73% |
-0.62% |
|
Energy/XLE |
-2.48% |
-3.77% |
|
Industrials/XLI |
-2.59% |
-3.54% |
|
Utilities/XLU |
-5.84% |
-10.70% |
Healthcare and consumer discretionary are the only two sectors with significant gains on the year and those were also the top performing sectors for the Q2. Three sectors have seen significant losses on the year—energy, industrials and utilities. The other five sectors are up or down less than one percent.
The HedgeCoVest Composite Models performed really well considering the choppiness of the market in the second quarter. Of the 15 models, 11 gained ground during Q2 and three of the models gained over 3%.
|
HedgeCoVest Sector Model |
Q2 Performance |
YTD Performance |
|---|---|---|
|
3.72% |
6.38% |
|
|
3.71% |
1.15% |
|
|
3.14% |
0.99% |
|
|
1.95% |
3.64% |
|
|
1.39%* |
1.39%* |
|
|
1.07% |
-1.22% |
|
|
0.84% |
0.13% |
|
|
0.80% |
23.92% |
|
|
0.59% |
2.56% |
|
|
0.18% |
-3.92% |
|
|
0.13% |
18.01 |
|
|
-2.15% |
0.31% |
|
|
-2.54% |
3.06% |
|
|
-4.73% |
-3.88% |
|
|
-4.92% |
-4.32% |
*The HedgeCoVest Technology Short-Only Model was added to the platform on June 15, 2015 and the second quarter and YTD numbers are from June 15 through June 30.
The YTD numbers tell a similar story to what the Q2 numbers tell with 11 of the 15 models gaining ground. It is interesting to note that of the top three performing models on the year, one is a long-only model, one is a long/short model and one is a short-only model.
All in all, the second quarter was a good one for the HedgeCoVest Composite models. They are doing precisely what investors want them to do—provide respectable returns regardless of market conditions and doing it with less volatility than the overall market.
