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Sectors: What’s been the impact of recent events?

March 22, 2022 | 4m 59s

Learning: Unstructured

For professional investors only.

Major central banks are in tightening mode and have turned increasingly hawkish, inflation and interest rates are on the rise, and Russia’s invasion of the Ukraine has caused widespread uncertainty for markets. In this short video, Paul Jackson sat down with András Vig to get his thoughts on the potential impact to sector performance and whether his sector preferences have changed at all as a result of these events. András also explains why he highlighted basic resources, technology and travel & leisure in his latest quarterly Strategic Sector Selector report. Keep your eyes peeled for the next Strategic Sector Selector report being published in April!

Definitions:

Defensive sectors: stocks or sectors that have business models that investors consider to be relatively stable throughout the business cycle. We refer to the following sectors as defensive: food & beverage, personal & household goods, healthcare, telecommunications and utilities.

Cyclical sectors: stocks or sectors that have business models that investors consider to be sensitive to the economic cycle. We refer to the following sectors as cyclical: oil & gas, basic resources, chemicals, construction & materials, industrial goods & services, automobiles & parts, media, retail, travel & leisure, banks, financial services, insurance, real estate and technology.

Value sectors: stocks or sectors that have low price/book value or price/earnings multiples or high dividend yields. Some of these stocks or sectors may generally trade at a discount compared to the market if investors expect their earnings or dividends to grow at a slower pace than the market. Examples of such sectors are utilities, telecommunications, banks and oil & gas.

Growth sectors: stocks or sectors that have high price/book or price/earnings multiples or low dividend yields, because investors expect them to have high earnings or dividend growth. Examples of these sectors are technology, healthcare and food & beverage.

Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important Information

This marketing communication is for discussion purposes only and is exclusively for use by professional investors in the UK. It is not intended for and should not be distributed to, or relied upon, by the public. Data as at 24 February 2021, unless otherwise stated. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. This material has been issued by Invesco Asset Management Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK. Authorised and regulated by the Financial Conduct Authority.