Investors Should Be Choosy About Late CyclicalsJune 23, 2014
Recent economic stats have given investors reason to worry about an inflation scare. The stocks that tend to outperform in such an environment are what we call “late cyclicals”, which are industrial, energy and basic material companies. In the chart below, we highlight an equal-weighted basket of late cyclicals from the MSCI World Index relative to the MSCI World Index itself. After several years of underperformance, late cyclicals appear to be staging a turnaround.