Jobs Data Supports the Investment Case for Cyclicals

Last Friday, the U.S. Department of Labor reported that the country added a colossal 254k jobs in September. These findings obliterated Wall Street’s estimates, and increased confidence that the Fed’s mission of attaining a soft landing may actually be doable. 

With economic optimism on the rise, now may be a good time for investors to reconsider their exposure to cyclicals. A recent monthly review from Eaton Vance highlighted why cyclicals may deserve more attention at this time.

“A positive inflection in economic surprise over the last month now bears watching with the potential to drive a more cyclical shift in equity market internals,” Eaton Vance noted. 

While defensive stocks have dominated the market for much of 2024, it may do well to add a bit more cyclical exposure to an investor’s portfolio. Wary investors can use the Calvert US Large-Cap Core Responsible Index ETF (CVLC ) to ease into more cyclical stocks. 

CVLC gives its investors access to a robust selection of large-cap equities with responsible business models. The fund operates with a low net expense ratio of 0.15%. 

Much of CVLC’s portfolio is constituted by reliable large-cap names that would be expected to be in a core fund, like Apple, Nvidia, and Eli Lilly. However, a little over 10% of the fund’s portfolio is currently allocated to the consumer discretionary sector. 

With CVLC, investors can gain some headway into potential momentum from cyclicals, with the added ballast of big names in tech, financials, and health care. This well-rounded portfolio can be a more risk-averse means of benefitting from enthusiasm over a potential soft landing. 

The fund is generating strong results on both a near- and long-term time horizon. As of Oct. 10, 2024, CVLC’s NAV has risen 5.26% within the last month. Over the last twelve months, CVLC’s NAV has leaped a staggering 34.54%, as of Oct 10, 2024.

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