Do Defensive Sectors Outperform In Down Markets? by Andrew Birstingl, FactSet With U.S. stock indices in the red to start the year and market volatility beginning to climb, some are suggesting that investing in the defensive sectors may be a smart bet. The intuition here is that companies in the defensive sectors, like Consumer Staples, Utilities, and Health Care, have lower betas and are, therefore, less prone to changes in the business cycle. Do defensive sectors outperform in down markets and, if so, by how much? How do defensive sectors perform during varying levels of market volatility? For this report’s analysis, the…
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- In 10 Worst Performing Quarters, Defensive Sectors Outperform Benchmark by 4.9 Percentage Pts
- Defensives Outperform Benchmark in 80% of “Down Months” and 33% of “Up Months”
- Defensive Sector Returns Exceed Benchmark Returns When VIX Levels are High
- Defensives Outperform Benchmark During 2008 Financial Crisis; Underperform During 2001 Recession
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