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Two Stand Out Sectors

21 February 2014 by HCM

Since the beginning of the year, most of the sectors have performed in line with the market, and risk premia have moderately risen. Surprisingly enough, even though worries regarding Emerging Markets were the reason behind the big January sell-off, it was difficult to build a successful portfolio based on geographical exposure. The main driver explaining the performance of the 2 stand out sectors was actually M&A, with 2 radically different outcomes. In the retail space, buyers are suspected to fancy leveraging their targets, and that send risk premium sharply higher. In the cable sector, asset disposals could on the contrary lead to deleveraging, making it the best performer of 2014 so far.