Last week, we flagged the leadership of utilities stocks and the underperformance of “cyclical” sectors as signals that investors may be positioning for slower economic growth. As a result, investors are still looking beyond bonds for their income needs. Interest rates are lower in 2014 with the 10-year Treasury yield down to 2.7% from about 3% at the start of the year. “Widows and orphans 1: momentum trading hedgies 0,” the analysts joked.
Meanwhile, some hedge funds that loaded up on flashier, high-growth names are feeling the pain of the recent pullback in momentum stocks.įalling interest rates and a preference for yield have “lit a fire under utility stocks … the best performing sector in the S&P 500,” ConvergEx Group said in a note Wednesday.
Companies in stodgy industries that pay steady dividends - so-called widow-and-orphan stocks - are leading the way this year.
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