Goldman's playbook for profiting from rising rates is working. Here's what's in it
One investing strategy to find winners in a rising interest rate environment is already paying off in 2021, according to Goldman Sachs. The benchmark 10-year Treasury yield pushed higher again on Friday morning , putting it near its recent highs as investors prepare for the possibility that bond yields to continue their upward march. One strategy that is working so far is finding stocks with short duration, Goldman strategists said in a note. Duration is a measure of how quickly a company can repay shareholders through earnings. Companies with long-term growth profiles, especially those that don't currently turn a profit, tend to have long duration metrics, while mature companies with more modest growth prospects have shorter durations. "Short-duration stocks are likely to continue to outperform in the near-term, given our forecast for additional upside to the nominal and real 10-year [Treasury] yield in the next few months," the note said. The firm put together a basket of short duration stocks, with the median stock in the group up 16% for the year. Some of the names on the list were part of Goldman's short duration screen published earlier this month , including Molson Coors . The stocks included below are among the basket's top performers year to date. The best stock in Goldman's basket in 2021 has been media company Discovery . The company launched its streaming network, Discovery+, in January, and also may have benefited from attempted short-squeezes on heavily shorted stocks . Some of the other strong performer are legacy stocks, including automaker Ford . The company announced new investments in its electric vehicle programs this year, showing investors that they shouldn't be left out of a boom that has benefited less-established companies.. Chipmaker Intel , which is one of the largest companies by market cap on the list, is up 26% year to date. Homebuilder Lennar and packaging company WestRock have also jumped more than 20% in less than three months.

A "Sold" sign is displayed outside a home under construction at a Lennar Corp. development in Montgomery, Illinois. Daniel Acker | Bloomberg | Getty Images