Chart of the Quarter
In many ways calendar year 2023 looks a lot like that of 2022. The most volatile assets in 2022 are some of the best performers this year. And we know the technology sector took the brunt of the market selloff last year. Growing evidence that the economy is slowing warrants allocations to the historically lower volatility sectors that have underperformed so far this year (although these sectors outperformed the past quarter). Not only do the lower volatility sectors offer the prospect of strong relative performance, these companies also trade at more attractive valuations given year to dat performance. Lower volatility stocks are currently trading at 17x earnings where global stocks are trading at 20x. As investors historically pay more for higher quality, the current discount is worth noting.