Sector-rotation strategy favours cyclical stocks, Canoe manager says

Rob Taylor shifts away from interest-sensitive sectors.

Diana Cawfield 24 November, 2016 | 6:00PM

Cyclical stocks are likely to lead the market higher in 2017, says Rob Taylor, senior vice-president and portfolio manager at Canoe Financial LP. He predicts that the key to outperformance will be stock picking and sector rotation from higher-yielding defensive stocks to more cyclical fare.

Taylor, lead manager of Canoe Equity Class, sees 2016 as a transition year, following a tough couple of years of plummeting oil prices and a significant market downturn. "We feel that we are in the middle of a recovery," says Taylor, "likely in the fourth or fifth inning of the market move."

Anticipating a recovery, the stock market has started to move higher even though we haven't necessarily seen the global economy improve to any significant degree as yet, Taylor adds.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Microsoft Corp213.67 USD-0.30
Nike Inc B97.99 USD1.03
Starbucks Corp74.29 USD0.98
Storm Resources Ltd1.47 CAD-1.34
Union Pacific Corp166.39 USD0.24
US Bancorp36.44 USD6.49

About Author

Diana Cawfield

Diana Cawfield  Diana Cawfield is an award-winning writer who has been a regular Morningstar contributor since 2000. Her numerous publication credits include the Toronto StarAdvisor's Edge and Chatelaine, as well as the Canadian Securities Institute's online educational services.

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