by David Templeton, Horan Capital Advisors
In a recent AlphaNow report from Thomson Reuters, it shows U.S. companies that generate a majority of their revenues from the U.S. are outperforming the broader market S&P 500 Index. The report highlights that 150 companies/stocks generated at least 95% of their revenues within the USA and outperformed the S&P 500. On a 2013 year to date basis (through May 1), they note their total return beat the S&P 500: 15% vs. 12%, and 31% to 21% in the past two years.
The report also notes, "The three top overweights come in sectors which have all outperformed so far in 2013 (see chart) – financials (+13% overweight), telecom services (+11%) and utilities (+10%). That’s before adding in consumer discretionary (+2% overweight) which is the second best performing sector as of May 2." Of late though, much has been stated about the potential rotation underway out of these more defensive sectors and into the more cyclically oriented ones. Investors need to be on guard about chasing past returns.
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