Zacks Model Portfolio Rankings Half Time Report

CHICAGO, July 31, 2014 /PRNewswire/ -- Despite starting this year on the soft side, amid investor concern over a variety of issues and some corrections for many stocks and sectors, the U.S. stock market was able to continue its slow, steady push higher in the first half. The first half turned out to be a stock pickers market, though, as the major indices didn't all rise and fall together for the first time since the Great Recession.  

"The large caps outperformed the small caps. There were also clear winners in some sectors with utilities taking the top prize in the S&P 500 in the first six months of the year," says Tracey Ryniec, Value Stock Strategist at Zacks.com, the online unit of Zacks Investment Research. Zacks ranks the performance of the model portfolios of some of the street's top brokerages as well as those with a little less name recognition. The model portfolios in the Zacks survey include U.S. traded equities including ADRs.

"Sector choice was absolutely key to outperformance in the first half of 2014," says Ryniec. "Firms that were in the first half's hot sectors, and who avoided those areas that have struggled in so far this year, including social media, retail and some restaurant names, were able to outperform." The golden trio of sectors in the first half seemed to be utilities, energy and healthcare. Stock pickers with holdings in those areas faired pretty well. There were also specific pockets of strength in the computer technology group.    "Certain stocks in that group performed very well and, as with anything else, if you had them in your portfolio, you did well also."

Most of the model portfolios ranked by Zacks, outperformed the S&P 500 total return for the first half of this year of 7.14%. Some outperformed by a wide margin.

The brokerages ranked for first half 2014 (1-1-14 through 6-30-14) are as follows…

Similar market conditions have continued, so far, into the second half of the year. "Those that correctly allocate to the hot sectors will continue to be rewarded", says Ryniec.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor's. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. 

Zacks calculates the performance of the brokerage "model portfolios" it tracks, on an equal-weighted basis. Total return performance figures include stock price changes, and dividends for each addition and deletion to the model portfolios. Commissions are not included.  

The leading brokerage firms employ analysts who produce recommendations for hundreds of stocks, which cannot all be bought for a client portfolio. These brokerage firms then create model portfolios from all of the stocks each firm is following.  The process to create these lists range from a top down quantitative methodology, to a bottom up fundamental process.

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SOURCE Zacks Investment Research, Inc.