Sectors represent groups of companies that make similar products or offer comparable services. Recent history shows the challenge of trying to pick “hot” sectors in advance. Annual Rankings of Equity Sector Returns 2014–2023
Holding stocks across all sectors puts investors in a position to capture higher returns where and when they appear. Past performance is not a guarantee of future results. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.
The annual returns are Russell 3000 Index Global Industry Classification Standard (GICS) sector returns. Real estate investment trusts (REITs) are shown as a separate category to illustrate their exclusion from certain funds. REITs are classified according to the GICS. Real Estate is excluded from the chart because it did not exist as a GICS sector category prior to September 2016. S&P/MSCI changed the GICS methodology after market close September of 2018 to rename “Telecommunication Services” to “Communication Services” and to reclassify a number of companies to that sector. Dimensional reports these changes in company membership to Communication Services starting October 2018, but changes the name historically to Communication Services to maintain consistency. Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. The GICS was developed by and is the exclusive property of MSCI and S&P Dow Jones Indices LLC, a division of S&P Global. Sector Definitions: Communication Services: Companies that provide telecommunication services, such as wire line, wireless, and internet access. Consumer Discretionary: Companies that produce nonessential goods and services, such as automobiles, apparel, and leisure activities. Consumer Staples: Companies that produce basic necessities like food, beverages, and household goods. Energy: Companies involved in the exploration, production, refining, transportation, and marketing of oil, natural gas, and other energy sources. Financials: Companies that provide financial services, including banks, insurance companies, and investment firms. Health Care: Companies that provide health-care products and services, including pharmaceuticals, biotechnology, medical devices, hospitals, and health insurance. Industrials: Companies that manufacture industrial goods, such as machinery, aerospace, construction materials, and chemicals. Information Technology: Companies that design, develop, and sell computer hardware, software, and services. Materials: Companies that produce basic materials, such as metals, chemicals, and forest products. REITs: Companies known as real estate investment trusts, which own, operate, or finance income-producing properties. Utilities: Companies that provide essential utilities, such as electricity, water, and natural gas. Comments are closed.
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By Tim Baker, CFP®Advice and investment design should rely on long term, proven evidence. This column is dedicated to helping investors across the country, from all walks of life to understand the benefits of disciplined investing and the importance of planning. Archives
August 2024
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