You Need G.U.T.S. to Beat F.A.N.G.

The fabulous F.A.N.G. stocks — FB, AMZN, NFLX, GOOG/GOOGL — led the market in 2015 with a stunning 77.5% gain.

Coming into 2016, many traders predicted the mighty F.A.N.G. trade would lost its leadership status.

And to some extent that's not happened.

2016 has been led by another acronym, which I've dubbed G.U.T.S.:

Gold (GLD): +28.2%
Utilities (XLU): +19.7%
Treasuries (TLT): 14.3%
Silver (SLV): +48.9%

That's an average of 27.8%, though I could skew it higher by tossing in GDX (+128.6%) or GDXJ (+168.9%).

The G.U.T.S. trade has worked for 2 simple reasons.

Relative to 2015, traders' expectations for Fed rate hikes are way, way lower.

Meanwhile, global financial uncertainty has risen and overseas central banks have pushed down their currencies and rates, in turn increasing demand for US securities, pushing down our rates.

That said, the death of the F.A.N.G. trade has been overstated.

Thanks to strong earnings trends, FB and AMZN are up 18.5% and 12.6% YTD respectively, offsetting NFLX' -18.4% decline and GOOG/GOOGL's barely positive performance.

As of this morning, F.A.N.G. is up 3.3% YTD, so it's actually outperforming the Nasdaq Composite (+3.1% YTD).

It's also doing better than the ultimate risk-on heavyweight, biotech. IBB is down -13.4% and XBI is offf -9.9% YTD.