sandlots heat up.
Utilities: First up on Lutz’s summer shopping list are Utilities. One thing that must be battled in the summer in Lutz’s mind is “the theory of the ‘sell in May, and go away trade,’” and investors need to play defense. “Utilities have obviously been one of the areas that have picked up by funds because it tends to be a defensive sector.”
Health Care: Another defensive summer sector for Lutz, because “at the end of the day health care has been picking up and you can start seeing some tailwinds as people become more comfortable with Obamacare.”
Technology: One of the most hated sectors from a seasonality point of view, Lutz says technology could see a boost this time around. Despite higher beta names getting stung in summer, Lutz notes he “tends to like to go where everybody hates, right now no one seems to like the technology sector.” It’s a contrarian play, just like financials would be too in this environment.
You can see the full “Breakout” segment below:
Related: Utilities SPDR (ETF)(NYSEARCA:XLU), iShares Dow Jones US Healthcare (ETF)(NYSEARCA:IYH), iShares Dow Jones US Technology (ETF)(NYSEARCA:IYW)