Which sectors are having the toughest (and best) time right now in the MM / Net Neutral space?
Everyone can look and see how much SMH and others are up so much YTD. But curious for those in the market or net-neutral space, what sectors feel easier / harder to make money in at the moment? I understand this will always change and what's hot one moment won't necessarily translate next year, but I am curious. Heard a few sectors are just having pods shut down left and right, while others they want to put on more exposure. Anyone have any opinions / stats?
Based on the most helpful WSO content, here’s a breakdown of sectors in the market-neutral space and their dynamics:
Tougher Sectors:
Easier/Promising Sectors:
General Observations:
If you're looking to allocate or assess opportunities, focusing on macro-driven sectors or those with clear growth trends (like TMT) might be advantageous, while being cautious with sectors like biotech or consumer that present higher complexity or volatility.
Sources: An Overview of Technology Media and Telecom (TMT) - Part 1 of 2, What sector is easiest/best to cover under a market neutral frame work?, An Overview of Technology Media and Telecom (TMT) - Part 1 of 2
This changes from one month to the next.
you tell us what you’ve heard, i’ll tell you
Heard consumer and energy had a lot of pods shut down or departures (more than even other sectors) last 6-12 months. This could be sampling bias / a few firms tilting feedback hence my reason for asking.
if you get off anon i can pm you
Consumer and Healthcare shed a lot
Consumer - I heard many saying it’s been rough in consumer, but most good ones I know survived. Those just followed data without giving much thought got screwed (last Oct CE data unwind)
HC: probably the worst one, tho non-medtech has been recovering last couple months
TMT: depends whether has semi or not. There were many TMT PMs without semi exposure (just SW, IT Services, Payments, Internet), must’ve been rough
Financials: heard least blow-ups, complains. Even bad ones surviving
Industrial: don’t know much but seems fine
Energy: has always been volatile but seems better than past
This is from my small sample size curious what others think
Consumer been tough. Just trying to hang in. Lot of cuts this year already
Op here honestly that’s where I’m at now and other than healthcare seems most rough. Not sure exactly why. Everyone seems in a lot of the same names and way too much alt-data mind games. I’m sure grass is always greener but I also helped trade some other adjacent sectors and was not as bad. Last 2-3 years particularly harder and not sure if it gets easier with candlestick, eminence, other pods, etc. out. Was recently offered a role in financials but feels like i would be trading in a skill set that has generated consistent pnl (non-market neutral though and smaller cap). Seems less short term oriented but who knows and the SVB thing a few years ago ended a lot of pods. Next consumer gig would be different than current role. Anyways just my 2 cents and curious.
Hi OP, do you mind PM'ing me? In a similar spot
biotech been difficult to find shorts
I disagree. Plenty of shorts around, ones that have worked tremendously as well.
Reprehenderit et possimus mollitia inventore natus nulla consequatur. Placeat cumque quidem ad magnam id adipisci incidunt qui. Magni ipsam reprehenderit dolor repudiandae. Atque unde eos hic recusandae dignissimos autem a.
Vitae voluptatem dicta non et nihil assumenda aspernatur est. Quidem quo iste ipsum quia aut quo.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...