Insurance
Fade The Insurance Rebound…
Underweight Stocks in the S&P insurance index have been mostly treading water since their collapse at the beginning of 2018, a result of reasonably solid premium growth and low catastrophe losses offsetting slowing growth in house & auto sales, the fundamental driver of insurers’ top line…
Underweight A seldom considered victim from the slowdown in both the housing and auto markets is the top lines of property & casualty insurers. Relative growth of insurers and home & auto sales have typically shown a reasonably strong correlation and the four-year long…
Underweight Since downgrading the insurance group to underweight nearly two years ago, we have been on the lookout for signs the environment had at least moderated; this has not been the case. Pricing power has recently started to accelerate to the downside which, when combined with…
Underweight While we continue to recommend a core portfolio overweight in the S&P financials index, the S&P insurance sub-index remains our sole underweight. Unlike its financials brethren, the insurance industry is defensive rather than cyclical and thrives when the economy is slowing…
Highlights Portfolio Strategy Reviving global machinery end-demand alongside a global capex upcycle, are the key pillars of our high-conviction overweight call in the S&P construction machinery & heavy truck index. The current macro backdrop is unforgiving for defensive insurance…
Dear Client, Today we are sending you a two-part Special Report prepared by my colleague Billy Zicheng Huang of our Emerging Markets Equity Sector Strategy team, entitled “A Sector Guide To A-shares”. Part I of the report was published in September, and emphasized the key takeaways from MSCI…
Underweight Late-2013 saw all the right economic conditions moving in favor of insurers: the economy was entering a soft patch, the yield curve was flattening and the U.S. dollar was gaining momentum. The insurance market began hardening and the industry went on a hiring spree to…
Highlights Portfolio Strategy The latest wobble in the financials sector is a buying opportunity, with the exception of the defensive insurance index. Our tactical overweight in utilities has played out. Take profits and downgrade to neutral. Weak beverage operating metrics argue for a…