• Regional strategy — Downgrade the U.K. to Underweight from Overweight.  Our upgrade of the U.K. to Overweight in October 2014 proved to be a “value trap.”  While the U.K. remains relatively cheap compared to other countries and regions, the earnings outlook has deteriorated sharply.
  • Sector strategy — Our sector strategy is unchanged and remains “less cyclical, more defensive.”  We maintain our relatively defensive posture given pockets of economic weakness globally.  We are Overweight Health Care in North America, the U.K. and Europe ex U.K.  We are Underweight or Neutral Materials in the majority of regions.
Figure 1: Regional Rankings Arrows Indicate Change vs. Last Month

Figure 1: Regional Rankings
Arrows Indicate Change vs. Last Month

Figure 2: Sector Rankings Arrows Indicate Change vs. Last Month

Figure 2: Sector Rankings
Arrows Indicate Change vs. Last Month

For more information about this report please contact Tanya.Khotin@cornerstonecapinc.com or Alice.Petrofsky@cornerstonecapinc.com.

Please see the attached document for important disclosures.

 Michael Geraghty is the Global Markets Strategist at Cornerstone Capital Inc. He has over three decades of experience in the financial services industry including working as an investment strategist at UBS and Citi.