Monday, January 17

American stock funds squeeze the pull of Wall Street

At the end of the year we already know what the most profitable categories of investment funds. The top ten categories have double-digit appreciations.

The good year that the American stock market has experienced has resulted in the evolution of investment funds in this category. American equity vehicles report an average return of 31.24 percent, according to VDOS data.

This is because Wall Street has outperformed European equities Due to the fact that the United States was moving faster than the rest of the markets towards recovery, with prospects of reaching it in the first half of 2022, based on three variables: the recovery of social closeness, the extension of fiscal stimuli and the recovery of the labor market. In relation to the latter, the labor market is approaching full employment.

The second best category of the year corresponds to funds from the energy sector. This category is scored a few weeks before the end of the year with a profitability of 28.93 percent.

EToro market strategist Ben Laidler believes these funds will benefit in the coming months from still “higher prices for longer as the commodity cycle lengthens, with cyclical demand remaining strong.”

Also, structural “green demand” will continue to accelerate and investment will struggle to catch up. Something that is already reflected in the investment funds of the ecology sector, which has a revaluation of just over 28 percent.

Growth vs value

The Turnover of stocks from growth to value was one of the key trends in investing from the end of 2020 and the beginning of 2021.

After five months of steep style shifting towards so-called ‘value’ equities and profit-taking on ‘growth’ stocks, the market once again focused on fundamentals and opted for growth stocks, with a particular focus on innovative companies that benefit from an acceleration of their income and profits.

However, since late summer, hWe have started to see signs of overheating in these quality / growth values.

Even so, both categories ended the year in a very positive way, as the investment funds of USA growth equities and USA value equities posted returns of 28 percent and 27 percent respectively.

For next year, and with the prospect of higher bond yields between now and early 2022, a final bullish surge in value stocks could take place in the same period. “This phenomenon could last until the end of the first quarter,” they explain from Candriam.

The financial sector leaves the crisis behind

The financial sector has been another category that has performed the best this year. The Sector funds score a return of 26.88 percent, benefiting from the return to the dividend, better-than-expected results, especially in American banks, and the reduction in provisions.

And it is that to date these products were heavily punished as a result of interest rates anchored at zero percent, which was aggravated by the arrival of the coronavirus, and less activity as a result of the pandemic.

The arrival of vaccines gave wings to the sector, which had to undertake heavy provisions as a result of the possibility of an increase in defaults.

Telecos and small and measures companies

The small and medium-sized companies have also registered excellent stock market performance This was reflected in the funds that invest in the category, scoring a return of 24 percent.

These companies benefited from vaccines as well, as small-cap value stocks in cyclical sectors have generally performed better. Energy stocks also enjoyed a strong rally as commodity prices rose.

The ranking closes on technology and media sector, with a double-digit increase as well. Specifically, 22 percent.

For this year, Janu Henderson analysts predict that it will be one of the categories that will benefit from the continued growth of the Internet and the arrival of the metaverse.