Pockets of Value Remain in Agriculture, Chemicals Industries
Decline in the demand for lithium should be short-lived.
The Morningstar US Basic Materials Index outperformed the broader market in the second quarter of 2020 by over 400 basis points. Year to date, the sector has now lagged the Morningstar US Market Index by over 800 basis points, down from a year-to-date loss of more than 760 basis points a quarter ago. Trailing one-year underperformance fell to 530 basis points, down from more than 1,000 basis points a quarter ago. As a result of the second-quarter rally, just a third of the U.S. basic materials stocks we cover now trade in 4- or 5-star territory. However, we think investors can still find attractive risk-adjusted opportunities in the sector, particularly in the agriculture and chemicals industries.
U.S. materials index versus the U.S. equity index. - source: Morningstar
Kristoffer Inton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.