Our picture of the markets is quite different from that of other asset managers. We use an evaluation system that includes earnings, growth rate, beta, and bond yield to analyze our database of companies included in the 154* separate industries in Standard and Poor's Industry Codes and divided among the nine basic market sectors.
We apply this system to approximately 2,000 domestic** and approximately 2,300 foreign securities included in our universe. We then compare these securities' valuations to their current market price to arrive at a value-to-price ratio for each name, and, in turn, to develop a composite value-to-price ratio for each of the 154* industries.
By comparing industry performance to market performance, ICON seeks to calculate "relative strength" as a measure of performance and to identify industries that demonstrate leadership against the current market, whether domestic or international. We believe this combination of being underpriced relative to fair value and having relative strength in line with or greater than the broad market puts certain industries and securities in a favorable position to outperform the market average and to capture market themes.
Finally, a value-to-price ratio is computed for all of the domestic and foreign stocks in our universe to determine whether the entire U.S. market and foreign markets are overpriced or underpriced.
Historical Sector Performance (PDF)
