U.S. technology and healthcare stocks are well positioned to benefit in an environment of rising interest rates, according to a new Standard & Poor's report. <\/p>\n
Sam Stovell, chief investment strategist for equity research, said the U.S. Federal Reserve has tighten monetary policy 13 times since 1946. <\/p>\n
On average, U.S. equities climbed 7.3% in the 12-month period following the first rate hike, which is 100 basis points below the overall performance of stocks over the 64-year period. Performance was particularly sluggish in the first six months, however the S&P 500 only fell 31% of the time in the year after the Fed started to raise rates, Mr. Stovall's research concluded.<\/p>\n
The best performing sectors have been information technology and healthcare. Tech stocks climbed 20% on average and outperformed the broader index 69% of the time. Healthcare stocks climbed 13% and outpaced the market 54% of the time. The worst performing sectors, meanwhile, were materials and financials. <\/p>\n
S&P recommended investors overweight both technology and healtcare stocks as the Fed moves closer to raising rates later this year or early next. In particular, they mentioned Computer Sciences Corp.<\/a>, Gilead Sciences Inc.<\/a>, International Business Machines Corp.<\/a>, MEMC Electronic Materials Inc.<\/a>, Western Digital Corp.<\/a> and Yahoo! Inc.<\/a><\/p>\n