Why we’re shifting to utilities and consumer staples

By Matthew PierceCovestor

The Island Light Sector rotation portfolio was updated at the beginning of September as part of our regular rebalancing process.

Given recent and expected future market volatility, we reduced allocations from cyclical to defensive sectors.

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We expect that the utilities and consumer staples sectors will benefit from lowered expectations of a Federal Reserve interest rate increase and reduced materials costs for domestic utilities.

Technology

For the month, we reduced allocations to financials and consumer discretionary items and retained positions in technology and healthcare.

We have no current allocation to the energy, materials and industrials sectors.

Performance

The following table reflects the performance of our strategy, the S&P and the 9 sector ETFs that comprise our investment universe, through August 31, 2015:

Photo Credit: Stefano Mortellaro via Flickr Creative Commons

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The post Why we’re shifting to utilities and consumer staples appeared first on Smarter InvestingCovestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures.