Sector Strategies Offer More Diverse Returns Than Style Strategies: State Street

Using sector strategies in their portfolios would facilitate investors in taking a more nuanced and nimble approach to their portfolios, notes a State Street study.

David B. Mazza of State Street Global Advisors in a recent research note titled: “Staying a Step Ahead with Sector Investing” points out that investors can more easily differentiate attractive investments from poor investments if they are able to choose from a large number of securities with disparate returns and low correlations.

Sector strategies vs style strategies

The State Street analyst emphasizes that sector investing has a role to play and efficient portfolio construction and the flexibility of sector investing is even more relevant now. He highlights that relative to implementing investment decisions using individual stocks...