Utilities, Staples and Healthcare Lead When Bears Rule

Staples, healthcare and utilities experienced large relative outperformance in the 2000 and 2008 bear markets, and smaller outperformance during corrections since 2008. Utilities was an outlier heading into 2008 because it was a leading sector during the bull market, but it still went even higher in relative terms during the bear market. Healthcare, helped by Obamacare funneling cash to insurance companies and a biotech rally, peaked in 2015, but still saw relative strength durting corrections. Recent abslute strength is indicative of investors not realizing a bull market is underway, but some subset of long-only managers do know and are putting money where they expect it will lose the least.