12 December 2017

Technology hits a speed bump as investors rotate sectors


November witnessed a severe rotation out of Tech growth names at the end of the month that had repercussions across developed and EM markets. Within EM we saw, towards the end of the period, flows away from the high-flying names in the sector weigh on market-cap based benchmarks. Asian technology names such as Samsung and Tencent both corrected significantly at the end of the month, with the sector suffering its biggest weekly loss in almost two years.

Following this rotation, Emerging Markets were broadly flat in US dollars in November, but the MSCI Emerging Markets Index has still returned an astonishing 32.9%* in 2017 to date.

Similarly in the US market, we saw during the first three weeks of November a continuation of the ubiquitous mega cap tech-driven rally, followed by a strong correction in the final days of the month, markets again witnessing a strong sector rotation out of technology and into sectors such as financials or telecoms.

Technology Sector: Correction or Consolidation?
YTD 2017 vs November 2017


Sources: MSCI Indices / As end of November 2017


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