A comeback for sector investing

Asset allocation

Sector investing as a factor in global investing comes to the fore when economic cycles change. Which parts of the market attract the most attention and when, however, requires some analysis

With currency volatility and riskier asset classes setting the pace for global financial markets in 2003, many equity strategists heralded the return of regional allocation as the dominant factor in investing. Regional allocation's return came at the expense of sector investing and, to a lesser extent, style investing. These approaches had grabbed the headlines in the late 1990s and early years of this decade. This supposed return of regional allocation and the decline of sector investing is false in our analysis. After stock selection, regional allocation has always been the dominant fac...