In our Policy Engine, released last month, we highlighted several sectors that are currently rated neutral (essentially guidance to be at a market weight) that we believe may be poised for strong performance in 2026. We maintain a positive view of communication services as 2026 begins (the top-performing sector of 2024 and 2025) and continues to monitor technical analysis signals for any potential worrisome signs that suggest that sector may be getting fatigued after leading this bull market since October 2022.
Here are three sectors we have been neutral on recently and believe that they may be poised for an upgrade:
Healthcare remains firmly on our radar for a potential upgrade in early 2026, as it stands to benefit if the market rally broadens. Policy headwinds around drug pricing, the Affordable Care Act, and tariffs have largely cleared, while valuations remain compelling. If the…
