Gavekal Capital: 1Q 2015: Winners and Losers

Wednesday, April 1, 2015

1Q 2015: Winners and Losers

As we mark the passage of the first quarter, we thought it useful to get our bearings with a quick, general summary of what has worked (or not) so far this year. Per usual, the performance referenced below is on an apples-to-apples USD basis, and equally weighted to avoid any distortions caused by differences in market cap.

By country, equity performance in Russia has been the strongest so far (up nearly 22%) in 2015 while Greek stocks are firmly in bear market territory, having fallen nearly 25% in the first quarter:

By sector in the MSCI ACWI, Health Care is the runaway leader, having gained nearly twice as much compared to the closest runner-up, Information Technology. Meanwhile, stocks in the Energy and Utilities sectors are in the red so far this year:

Looking at just the Developed world performance, Health Care sector leadership is even more pronounced:

And, while the Health Care outperformance trend holds true for MSCI North America and MSCI Pacific, the leading sector in MSCI Europe has been Consumer Discretionary:

MSCI Europe

MSCI North America

MSCI Pacific

Emerging market equities have struggled across a wider range of sectors, with nearly half in negative territory year to date:

By region, Energy in MSCI EMEA has actually been the best performer so far in 2015:

Every sector in MSCI Latin America is negative, with Health Care down more than 30% ytd:

MSCI Emerging Asia, by contrast, has just one sector in negative territory for the year so far:

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
We offer the Gavekal Knowledge Leaders Strategy in multiple products for global investors. For more information about our product offerings please visit http://www.gavekalcapital.com.
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