Capital Markets: Observations and Insights

Bond-like Equities Are in Favor ​ The Search for Yield

YIELD

• Low interest rates are driving bond-like equity sectors to trade at premiums to their historical valuations while health care appears inexpensive due in part to political issues

P/E Relative to 20-Year Median

29%

28%

23%

16%

14%

14%

14%

10%

2%

1%

-3%

-5%

Energy

Utilities

S&P 500

Materials

Financials

Industrials

Health Care

Real Estate

Consumer Staples

Information Technology

Consumer Discretionary

Communication Services

Source: FactSet and UBS, based on S&P 500 Index as of 6/30/19. The Communication Services, Consumer Discretionary, and Technology sectors’ historical data have been restated to reflect September 2018 changes to the GICS sector classifications. Note that Consumer Discretionary ex-Internet Retail is at a 3% premium to its 20-year median.

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