Utilities THEME

1154.0 -16.55 (-1.43%) Sell

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UTILITIES THEME investors looking to preserve capital

14 min read

~UTILITIES was among the worst performers today. On a longer term basis, investors in Utilities made +0.02% per day. Tuesday's performance of -1.43% was a significant underperformance compared to it's daily average.

[Theme constituents]

Buy-and-Hold investors in ~UTILITIES experienced a maximum drawdown of -5.79% over the last three months. It returned +0.42% during this flat trending period. There were both Long and Short signals during this period, while the long signals were marginally more profitable than the short signals.

Trend

~UTILITIES has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, ~UTILITIES underperformed the SP500 index on 48% days. Which indicates that on days ~UTILITIES underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ~UTILITIES was mostly profitable and delivered on average +0.01% per day. It's best return during this period (of +3.05%) was on Friday, 16 Nov, 2018. While it's worst loss in the same period (of -3.11%) was on Monday, 17 Dec, 2018. There was initially a bearish trend during this period which started on 24 Sep, 2018 and went on till 26 Sep, 2018. The trend delivered -3.16% losses to investors. This was followed by a bullish trend that started on 15 Oct, 2018 and ended on 19 Oct, 2018. This bullish trend delivered +3.49% to investors.

On monthly basis, ~UTILITIES delivered profits in more months over the last year, than losses. ~UTILITIES delivered profits less regularly than SP500 index. ~UTILITIES was also a less risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -5.02% compared to -7.75% returned by SP500 index in Dec 2018. ~UTILITIES had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both ~UTILITIES and SP500 index significantly outperform during months when quarterly/annual results are announced.

What we now call 'finance' is, I hold, an intellectual perversion of what began as warm human love.
-- Robert Graves

~UTILITIES is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant fall in ~UTILITIES's volatility from 19 Sep, 2018 to 12 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ~UTILITIES has significant positive skewness in it's return distribution. This indicates that investors can expect ~UTILITIES to recover from drawdowns quickly. Which makes ~UTILITIES a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

~UTILITIES has more chance of extreme outcomes than the SP500 index. Therefore, ~UTILITIES must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than ~UTILITIES.

On a general note (since you are interested in ~UTILITIES), three instruments that deserve special mention are AMRH, TYHT and AYTU. They have all outperformed the market and must be closely watched for investment opportunities.

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