equity and fixed income strategy

December 2021

Equity and Fixed Income Strategy Valuations Starting to Matter Again Stéphane Rochon, CFA, Equity Strategist; Richard Belley, CFA, Fixed Income Strategist; Irtiza Naqvi, Associate

Here we go again. Another South African COVID variant has been uncovered with over fifty mutations. Sounds pretty sinister so the swift downward market reaction was predictable, especially given the strength we have seen in equities year-to-date. Before everyone panics though we would like to take a step back and reiterate that society is far better equipped to deal with this outcome than it was just a year ago. We will get more clinical information soon but already, Pfizer (we love that stock btw), Moderna, AstraZeneca and JNJ are already testing the efficacy of existing vaccines against this variant. Adjustments to formulations may have to be made but Pfizer already has the capacity to manufacture six billion vaccine doses annually. The company on the weekend stated that it can adapt the current vaccine within six weeks and ship initial batches within 100 days in the event of an escape variant. Moderna also said a new formulation could be ready in early 2022 if needed.

That gives us a measure of comfort, particularly as we have always thought that COVID vaccinations will become an annual (or bi-annual) event for the foreseeable future (similar to flu shots but far more critical) rather than a one to two shot deal. We will update our thoughts on this emerging issue as more information becomes available but at this point, it changes nothing to our relative preference for stocks vs. bonds with the caveat that investors need to be selective given inflated expectations for a number sectors and stocks (especially in the technology area).

This is the main topic of discussion for the present report. Looking at valuations for stocks -or other asset classes for that matter- is a terrible timing tool. In other words, just because an asset is expensive, does not mean it will get cheaper anytime soon. That being said, financial history has proven time and time again that being disciplined about the price paid for assets (having a “margin of safety” as Warren Buffet famously put it) is the best way to ensure an appropriate return for long term investors. This principle applies as much to real estate as if does for financial assets such as stocks. The main reason for this is that the stock market is inherently mean reverting meaning that excesses to the upside or downside tend to be corrected with opposite reactions (think of an elastic which is pulled to far and then snaps as a metaphor). A catalyst -in other words an event that will change investors’ perception- is usually needed for this process to begin to unfold.

So what might this catalyst be? We believe higher inflation is the best candidate at this point. The reason for this is that higher inflation erodes purchasing power and pushes interest rates higher. This, in turn, lowers the present value of future corporate free cash flows (which is in fact the fair value of stocks). The more investors believe these cash flows will grow in the future, the more those stocks are negatively impacted by this effect. We have written at length about the growing concern about inflation in the market, which was driven at first by supply chain constraints (which continue to be severe), and is now being exacerbated by labor shortages which are pushing up wages.

Figure 1: Recommended Asset Allocation Income Balanced Growth Aggressive Growth

Recommended Benchmark Recommended Benchmark Recommended Benchmark Recommended BenchmarkAsset Mix Weights Asset Mix Weights Asset Mix Weights Asset Mix Weights

Cash 5 5 5 5 5 5 0 5

Fixed Income 65 70 35 45 15 25 0 0

Equity 30 25 60 50 80 70 100 95

Canadian Equity 20 15 30 25 40 35 45 40

U.S. Equity 10 5 25 15 25 20 35 30

EAFE Equity* 0 5 0 5 5 10 10 15

Emerging Equity 0 0 5 5 10 5 10 10

* Within EAFE, we specifically recommend Continental European equity.

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Inflation Expectations

The current consensus is that inflation is set to come down significantly in the U.S. and Canada next year -to just over 2%- from multi-decade high levels (5-6% as measured by the Consumer Price Index). While supply chain improvements will help somewhat and we may get some longer-term support from productivity improvements, we still think that view is too optimistic. The key reason is that inflation expectations continue to rise for businesses and consumers, which results in households making purchases more quickly (i.e. buy today since tomorrow prices will be higher) and demanding higher wages (which the data shows unequivocally). We do not believe we are headed back to 1950s or 1970s hyper inflation but the Bank of Canada and the Fed may well have to start raising rates sooner rather than later to contain this pressure. While rising inflation is bad news for most consumers, well positioned companies with pricing power can actually expand their profit margins in such an environment.

The New York Federal Reserve noted in its October Survey of Consumer Expectations report “that median inflation expectations remained unchanged at the medium-term horizon at 4.2 percent and increased at the short-term horizon by 0.4 percentage point to 5.7 percent. Households’ labor market expectations continued to improve with earnings growth and job finding expectations increasing and perceived job loss risks decreasing.

Figure 2: Inflation Expectations

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Source: New York Fed Survey of Consumer Expectations The Atlanta Federal Reserve for its part published survey results showing that firm’s year-ahead inflation expectations increased significantly to 3.3 percent, on average. Key findings include: 1) Sales levels "compared to normal" remain unchanged. However, profit margins increased slightly; 2) Approximately 40 percent of firms expect both labor costs and nonlabor costs to put significant upward influence on prices; 3) About 30 percent of firms expect sales levels and margin adjustments to put moderate upward influence on prices over the next 12 months.

Figure 3: Year-Ahead Inflation Expectations

Source: New York Fed Survey of Consumer Expectations

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Meanwhile in Canada, a recent Canadian Federation of Independent Business survey showed that companies continues to anticipate a worsening inflation picture. Firms expect they will raise their prices by an average 3.8 per cent over the next year. That’s the highest in records going back to 2009 and more than double the historical average.

Figure 4: Canadian Federation of Independent Business Survey

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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

De-Anchor Risk?Canada's small firms expect prices to rise by more than twice average

Expection of Yearly Change in Prices* Historical Average

Source: CFIB, Bloomberg

*Average response to question: “In the next year, how much do you expect average prices to change?”

Still Bullish on Stocks But be Selective

Last month we increased our fair value estimates for the TSX and S&P 500 to 26,000 (from 24,000) and 5,000 (from 4,600) respectively. These higher targets were purely driven by higher corporate profits rather than a higher valuation multiple (which would lack conservatism in our view). We also noted that “we believe some bearish analysts may be underestimating the potential length of this economic cycle. The key reason for this is that there remains considerable pent up demand for leisure products, cars, electronics, technology solutions etc which should extend through 2022 and into 2023”.

More specifically, Facset reports that for Q3 2021 the earnings growth rate is close to 40%, which is well above the 5-year average earnings growth rate of 11.8% and just shy of the Q2 2010 record. The Financials, Health Care, Information Technology and Energy sectors have been the largest contributors to the increase in the earnings growth rate for the index since September 30 with Financials seeing the largest increase in earnings and Energy seeing the largest increase in revenue estimates. This trend fits nicely with our positive stance on both the Financials and Energy sectors which happen to be among the top performers when inflation has moved up historically while still having very reasonable valuations. Given their significant weight in the TSX (much higher than in the S&P 500) this also backs up our view that Canadian equities should outperform their U.S. counterparts for the next year at least.

Figure 5: S&P 500 Sector-Level Earnings Surprise

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6.70%

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9.80%

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14.60%

16.90%

Materials

Consumer Staples

Real Estate

Industrials

Info. Tech.

Consumer Discretionary

Comm. Services

Utilities

Health Care

Energy

Financials

S&P 500 Sector-Level Earnings Surprise %: Q3 2021

Source: FactSet

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The Drivers of Stock Returns

While multiple expansion1 was the key driver of market returns up to the middle of 2020, the baton has been passed on to earnings growth. Since then, corporate earnings have exploded upward at a historical pace. Insatiable demand for a number of goods has provided pricing power to a host of well positioned companies and has driven up profit margins.

The tables below show the S&P 500 and TSX progression (blue line) over the last 16 years, overlaid with index earnings (grey line). The panel below shows the market’s valuation as represented by the P/E ratio (red line – see footnote for a brief explanation). This graphically shows that the market P/E expanded significantly up to the middle of 2020 and has started to compress since then. Since then, stock returns have been purely earnings driven and we expect this trend to continue. In other words, it will become a foot race between earnings per share growth and P/E multiple compression. The silver lining -at least as we enter 2022- is that it would take very severe multiple compression to offset the current double-digit EPS growth pace.

This is especially true in Canada where valuations are back to historical levels which means our market has rarely been this cheap versus the U.S. (following a huge recovery in Financials, Industrial, Energy and Materials earnings).

Figure 6: S&P 500 EPS and Price

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S&P 500 - EPS - NTM (LHS) S&P 500 - Price (RHS)

Source: FactSet

Figure 7: S&P 500 P/E

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Source: FactSet

1We will discuss valuation multiples frequently in this report. A valuation multiple is simply a ratio of the market value of a stock or the market relative to a key metric. While imperfect (i.e. we prefer using free cash flow), in stock trading, one of the most widely used multiples is the price-earnings ratio (P/E ratio). The price/earnings ratio is the ratio of a company's stock price (or the market level) to the company's earnings per share (or the market’s overall earnings). The higher the ratio, the more expensive are stocks and vice-versa.then, stock returns have been purely earnings driven and we expect this trend to continue. In other words, it will become a foot race between earnings per share growth and P/E multiple compression. The silver lining -at least as we enter 2022- is that it would take very severe multiple compression to offset the current double-digit EPS growth pace.

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Figure 8: S&P TSX EPS and Price

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2006 2008 2009 2010 2012 2013 2014 2016 2017 2018 2020 2021

S&P TSX - EPS - NTM (LHS) S&P TSX - Price (RHS)

Source: FactSet

Figure 9: S&P TSX P/E

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2006 2008 2009 2010 2012 2013 2014 2016 2017 2018 2020 2021

Source: FactSet

Inflation Fears and Long Term Interest Rates

As we have written several times “However, the changing inflation and interest rate landscape provides some interesting geographic allocation opportunities. In Canada specifically, the market has reacted quite differently, posting far better median gains when interest rates were rising, likely because these periods coincided with inflationary pressure and associated strong commodity price cycles. We remind our readers that approximately a third of the S&P/TSX market capitalization is in the energy and materials sectors versus less than 10% in the U.S.”

Rising 10 year interest rates directly impact the price of bonds as higher rates mathematically lead to lower bond prices. The longer the maturity2 of the bond, the more pronounced the impact. They also have a significant impact on equity sector valuations and performance. It is well understood that rising interest rates have a nefarious impact on the performance of defensive, lower growth sectors such as Utilities, telecoms and REITs since 1) these sectors are typically very capital intensive so as interest rates rise, their costs of funds go up and 2) it makes the typical dividend yield advantage of these sectors less attractive relative to bond alternatives.

2Duration is an approximate measure of a bond's price sensitivity to changes in interest rates. If a bond has a duration of 10 years, for example, its price will rise about 10% if its yield drops by a percentage point (100 basis points), and its price will fall by about 10% if its yield rises by that amount (source: www.thestreet.com)

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From High Duration Bonds to High Duration Stocks

Perhaps less well understood however is the impact to “high duration stocks”. In simple terms, these are typically very high multiple stocks (e.g. a stock trading at a forward P/E of 50 to 100 times), where the bulk of the value comes from expected future growth in cash flows. In other words, while the stock may seem extremely expensive based on current profits, investors expect such strong growth in the future, that the current price still seems attractive.

Using Shopify as an example is instructive. In our view, this company has a great innovative business model and is the most valuable company in Canada by market cap. The very simple discounted cash flow table below uses consensus free cash flow estimates, uses consensus estimates and discounts those cash flows at a rate of 8.5% (including a 10 year bond “risk free rate of 2%). In this way we “reverse engineer” the current share price of US$1576.

Figure 10: SHOP Extremely Simplified Discounted Cash Flow Calculation With a 2% 10-Year bond “risk free rate”

PV % of value Consensus FCF for FY1 (2022, US$M 778.00 PV Period 1 13,583.35$ 7.2% EPS Growth Period 1 25% 2022-2026PV Period 2 23,374.95$ 12.5% EPS Growth Period 2 20% 2027-2030PV Period 3 150,470.83$ 80.3% EPS Growth Period 3 5% 2031 and beyond

100.0%Total Eq. Value 187,429.13$ Disc. Rate Period 1 8.5% Long Bond 2.0%+ Cash 6,300.00$ Disc. Rate Period 2 8.5% Hist. Eq. Risk Pr 4.5%

193,729.13$ Disc. Rate Period 3 8.5% Addtl Risk Prem 2.0%

Total Fair Eq. Value per share 1,560.00$ 8.5%ls

Current Price SPX 1,576.00$

Upside Potential -1%

Source: BMO Private Wealth, FactSet

Again we are not disparaging this remarkable Canadian tech success story. However, even if the company keeps meeting very high expectations, if the market factors that the long term bond rate increases by just 1%, this will increase the discount factor from 8.5% to 9.5% and REDUCE the fair value for the shares by almost 20%. This will happen through no fault of the company’s, just a reassessment of inflation/interest rate macro variables.

Figure 11: SHOP Extremely Simplified Discounted Cash Flow Calculation With a 3% Bond “risk free rate”

PV % of value Consensus FCF for FY1 (2022, US$M 778.00 PV Period 1 13,122.15$ 8.6% EPS Growth Period 1 25% 2022-2026PV Period 2 21,796.67$ 14.3% EPS Growth Period 2 20% 2027-2030PV Period 3 117,987.53$ 77.2% EPS Growth Period 3 5% 2031 and beyond

100.0%Total Eq. Value 152,906.35$ Disc. Rate Period 1 9.5% Long Bond 3.0%+ Cash 6,300.00$ Disc. Rate Period 2 9.5% Hist. Eq. Risk Pr 4.5%

159,206.35$ Disc. Rate Period 3 9.5% Addtl Risk Prem 2.0%

Total Fair Eq. Value per share 1,280.00$ 9.5%ls

Current Price SPX 1,576.00$

Upside Potential -19%

Source: BMO Private Wealth, FactSet

Historical Bubbles

While we do not believe that stocks are in an investment “bubble” in general, we do think Crypto currencies (i.e. Bitcoin, Ethereum and friends) and related equities certainly fit the profile. We accept that we will likely sound like dinosaurs for expressing such a view but continue to think that investments should generate positive cash flow and solid returns on investment (preferably paying growing dividends) to have merit. For the benefit of our readers we include the following summary table of historical investment bubbles, starting with the infamous 17th century Dutch Tulip bubble. The common thread between these episodes is that investors 1) thought it was different this time, 2) they were inflated by huge amounts of debt/leverage and 3) they invariably collapsed resulting in losses in the 70-90% range. Enough said.

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Figure 12: Selected Financial Bubbles Throughout History

Bubble Asset Class

Approx. # Days to

Peak

Approx. # Days

Decline

Total Length of Bubble

(Yrs)

Max. Multiple of

Starting Price

% Decline from Peak

Dutch Tulips: 1634-1639 Commodities 148 164 1 39.9x -93%Mississippi Company: 1718-1720 Equities 520 322 2 36.9x -64%South Sea Company: 1719-1720 Equities 324 150 1 8.4x -81%DJIA: 1921-1932 Equities 2,987 1,031 11 5.6x -89%US Rail Stocks: 1923-1932 Equities 2,162 1,033 9 2.4x -92%Gold: 1977-1982 Commodities 766 632 4 6.3x -60%Oil: 1973-1986 Commodities 1,005 1,612 7 2.8x -73%Nikkei: 1982-1992 Equities 2,919 914 11 5.1x -59%Japan RE: 1982-1992 Real Estate 2,894 940 11 6.5x -74%Polish Equities: 1992-1995 Equities 616 388 3 28.7x -70%DM Tech: 1995-2002 Equities 1,365 721 6 7.9x -78%US RE: 2000-2009 Real Estate 2,595 783 9 2.9x -73%Saudi Equities: 2003-2007 Equities 1,514 342 5 8.5x -66%US Financials: 2002-2009 Equities 1,604 738 6 1.9x -78%Gold: 2002-2015 Commodities 3,534 1,578 14 6.8x -44%Japan RE: 2003-2009 Real Estate 1,425 767 6 5.9x -76%Copper: 2004-2008 Commodities 1,151 127 4 4.1x -66%Uranium: 2005-2010 Commodities 911 1,005 5 6.6x -70%Oil: 2006-2008 Commodities 660 128 2 2.5x -69%China A Shares: 2005-2008 Equities 685 381 3 6.7x -71%Average N/A 1,443 656 6 11.4x -71%

Source: Man Solutions; as of 2017

Technical Analysis – Russ Visch

We might be jumping the gun a bit on an annual forecast for 2022 but there are a couple of long-term cycles that are likely to mature and reverse next year which bear watching. Before we get to that though, we should start with the “big picture”. A long-term chart of the Dow Industrials highlights a 16-year cycle that’s been playing out for more than one hundred years now where the index alternates between 16 year sideways trading ranges (secular bear markets) and 16 year steady uptrends (or secular bull markets). The rules of technical analysis are such that a trend changes when an index breaks out of a pattern, which means the most recent secular bull market began in 2014 when indexes broke out of their sideways trading ranges, not at the credit crisis low. This means we’re only about halfway through this secular bull if this cycle continues to play out as expected. (It’s also important to note that the second half of secular bulls is usually stronger than the first half) i.e. – the bias for equities should remain consistently positive all the way out to the end of this decade.

Figure 13: Dow Jones Industrial Average

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It’s not going to be a straight shot to the upside though. Pullbacks and volatility are all part of the process and if history is any guide, then the second half of next year could be quite volatile. Historically, an average cyclical bull market in the S&P 500 within those bigger 16 year secular bulls tends to last about 30 months on average with gains of 85-90%.

Figure 14: S&P 500 – 16-Year Cycles

This means that we’re only slightly above average in terms of the performance since the early 2020 low and since there are numerous instances of the S&P 500 more than doubling we’re not very concerned with the idea that the index has moved too far, too fast as of late. What does concern us though, is that if you apply the 30 month average to the March 2020 low, that takes us to August of 2022 where the “window” opens for a potential cyclical bear market. Now, it’s important to note that this is just a hypothetical at this point. All of the “canary in the coalmine” indicators that typically pre-warn of bear markets 8-12 months in advance have recently made 52-week or all-time highs. This includes things like credit spreads, CDS indexes, market-based measures of economic activity, and other risk on/risk off metrics such as the performance of discretionary stocks versus staples, banks versus utilities, etc. These are the gauges we will be paying close attention to in the first half of 2022.

The S&P/TSX Energy index broke out of a massive year-long base pattern earlier this year when it closed above resistance near 1675. That breakout shifted the long-term trend to bullish and opened an initial upside target that measures to 2375. The next target/resistance level above that is the 2018 peak near 2475.

Figure 15: S&P/TSX Energy Index

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Figure 16: S&P/TSX Composite Fair Value Figure 17: S&P 500 Fair Value

Present value % of value

Earnings per share growth

Discount rate

Period 1 (2022-2026) 5,993.09 22.9% 7% 8.0%Period 2 (2027-2030) 4,243.00 16.2% 5% 8.0%Period 3 (2031 - ) 15,930.19 60.9% 2% 8.0%

Rounded Fair Value 26,000 100.0% Next 12 month consensus 1,380 Implied terminal mult. 15.1 X

21,140 Long Bond 2.0%Historical Equity Risk Premium 4.5%

Upside Potential 23% Additional Risk Premium 1.5%Total discount rate 8.0%

Current Price

Present value % of valueEarnings

per share growth

Discount rate

Period 1 (2022-2026) 1,036.31 20.7% 7% 8.0%Period 2 (2027-2030) 735.37 14.7% 5% 8.0%Period 3 (2031 - ) 3,241.62 64.7% 3% 8.0%

Rounded Fair Value 5,000 100.0% Next 12 month consensus 227 Implied terminal mult. 17.8 X

4,600 Long Bond 2.0%Historical Equity Risk Premium 4.5%

Upside Potential 9% Additional Risk Premium 1.5%Total discount rate 8.0%

Current Price

Source: BMO Private Wealth; FactSet

Like The Bank of Canada, The Fed is Becoming More Concerned about Inflation

Last month we discussed the prospect for a more aggressive Bank of Canada (BoC) as inflation reached multi-year highs, ending quantitative easing earlier and pulling forward the tightening timetable. This contrasted with a more patient U.S. Federal Reserve (Fed), which only announced in November the start of tapering, despite higher inflation and stronger growth. More importantly, it maintained its inflation narrative as transitory, seemingly indicating that the bar was set relatively high to change the policy course.

Figure 18: How Fast Can Inflation Return to Target (Consumer Price Index)

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Canada CPI YoY % U.S. CPI YoY %

BMO forecast

Source: BMO Economics; FactSet

However, and in spite of still diverging opinions on the inflation trajectory, the tone around the Fed has changed lately. First, Chairman Powell was reappointed over a perceived more dovish candidate, Lael Brainard (who became the newly appointed Vice Chair). Second, U.S. President Biden and the White House voiced concern over inflation and the need for solutions to control it. Third, a chorus of current and former FOMC3 members has been more vocal about the need for the Fed to address the rise in inflation. Finally, the minutes of the last Fed’s meeting (November) showed the willingness of many members to speed up tapering and tighten policy faster if needed. This prompted some economists to start forecasting faster tapering, potentially doubling the pace soon and opening up the door for a June rate hike. Like in Canada, this resulted in a significant upward move in short-term rates.

3Federal Open Market Committee (FOMC): The branch of the Federal Reserve System that determines the direction of monetary policy specifically by directing open market operations. The FOMC is composed of the Board of Governors, which has seven members and five Federal Reserve Bank presidents.

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Fed Chair Powell caught the markets further off-guard during his Senate hearings in late November when he confirmed that the Fed may indeed increase the speed of tapering and, more importantly, admitted that the higher-than-target inflation should no longer be described as transitory. Surprisingly, this came only weeks after initially announcing the pace of tapering along with a press release confirmation that, “inflation is elevated, largely reflecting transitory factors.”

Figure 19: Different Impact on Canada and U.S. Short and Long Term Rates

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As a result, the shorter end of the yield curve has been adjusting to higher inflation expectations and a new rate hike timetable while the reaction at the longer end remains much more muted compared to earlier this year. In fact, long term yields seem to indicate a scenario where inflation would not be a significant long-term issue. As the transitory debate seems to be coming to an end, there is a perception that early actions of central banks will help moderate demand and lower both inflation and economic growth closer to more sustainable pre-pandemic levels. However, for many, there is also the perception that under the current environment, there is a growing risk of a policy error which could have negative consequences on global economies - hence the more muted reaction of long term yields and the subsequent flattening of the yield curve.

Figure 20: Flattening U.S. Yield Curves

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For investors, while counter-intuitive to common thinking, higher inflation and thus higher policy rates may not necessarily translate into higher long-term rates and not all tenors of the yield curve may be affected similarly going forward. In fact, before the recent news of the COVID variant Omicron, more attractive yields and opportunities to earn higher coupons became available in guaranteed investment certificates and mid- to long-term fixed income securities as interest rates were already factoring in more aggressive monetary policies. We admit that these opportunities may no longer be as attractive with the variant injecting a good dose of uncertainty into markets and leading to a flight to safety into government bonds, driving both yields lower and corporate credit spreads wider. It is still too early to say if this recent strain will prove more virulent than the Delta was earlier this year and what kind of lasting impact it will have on markets.

In the near term, the risk is that Omicron could lead to renewed locked down measures (in Europe in particular) further exacerbating supply chain issues and potentially slowing the recovery in labor markets and growth. But it also risks causing inflation to remain elevated for a bit longer than originally anticipated. This means that the inflation and policy tightening stories should again take centre stage with its yield curve implications. Until then, the demand for safe assets should remain strong, which should help this year’s performance of struggling fixed income portfolios. As we anticipate the yield curve to resume pricing in a tighter monetary policy expectations, we also expect more attractive opportunities to re-emerge, including better entry levels in credit markets.

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Source: Bloomberg, BMO Private Wealth; as of November 29, 2021

Figure 23: S&P/TSX Composite Earnings Yield vs 10-Year GoC Yield Figure 24: S&P 500 Earnings Yield vs 10-Year Treasury Yield

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Source: Bloomberg, BMO Private Wealth

Figure 21: S&P/TSX Composite Total Returns

S&P/TSX Composite Index Sector Total Returns (%) MTD YTD

Energy -2.89 48.71

Financials 0.72 32.16

Info. Technology 4.02 30.09

Real Estate -0.65 29.45

S&P/TSX Composite Index 0.68 24.21

Telecom. Services 1.95 21.30

Industrials -1.16 19.39

Cons. Discretionary 3.68 13.83

Consumer Staples 1.65 13.75

Utilities 0.02 6.56

Materials 2.71 2.11

Health Care -5.27 -12.49

Figure 22: S&P 500 Sector Total Returns

S&P 500 Index Sector Total Returns (%) MTD YTD

Energy -2.67 53.84

Financials -3.36 33.91

Real Estate 1.17 32.66

Info. Technology 5.36 31.38

Cons. Discretionary 3.41 26.51

S&P 500 Index 1.21 25.55

Telecom. Services -2.24 22.23

Materials 2.02 21.32

Health Care -1.09 18.01

Industrials -1.00 17.96

Utilities 1.31 10.56

Consumer Staples 1.59 10.49

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equity and fixed income strategy

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