The Globe and Mail reports in its Tuesday edition that when markets are unstable and volatility is on the rise, investors tend to eye alternative defensive products to protect their wealth. The Globe's Noor Hussain writes in the Number Cruncher column that the materials sector can be seen as defensive insofar as gold (its production being a key part of this sector) is negatively correlated to the market. Last month, because of the strong rally of gold and silver, materials was one of the best performing sectors in Canada. The sector rose 5.7 per cent in August compared with the S&P/TSX Composite Index, which gained 0.2 per cent. Year to date, the sector has advanced 22.9 per cent compared with 14.8 per cent for the S&P/TSX. Ms. Hussain tries to identify companies in the materials sector that have benefited from this trend. She focused on companies with a market capitalization greater than $1-billion. Her picks had to have a positive 12-month sales change. As well, Ms. Hussain looked for positive 12-month change in the economic value-added metric, among several other criteria. Ms. Hussain's recommended stocks are Kirkland Lake Gold, Franco-Nevada, Detour Gold, Centerra Gold and Pretium Resources.
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