Tag Archives: U.S. sectors
Shifting Equity Sensitivities with S&P 500 Sectors
Broad-based benchmarks such as the S&P 500® and S&P SmallCap 600® demonstrated an upbeat response to the U.S. presidential election, rising 6% and 11%, respectively, in November 2024. The spread in U.S. size segments was more muted relative to S&P 500 sectors. Exhibit 1 presents the November 2024 cumulative total return of the S&P 500…
- Categories Equities, S&P 500 & DJIA
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Under the Hood of U.S. Equities: Perspectives on Size, Sectors and Style
Large-cap, growth and tech-oriented companies have led U.S. equity market performance so far in 2024. Investors’ optimism for the application of artificial intelligence on these companies’ growth prospects propelled the S&P 500® Top 50, S&P 500 Information Technology, S&P 500 Communication Services and S&P 500 Growth to more than 20% year-to-date gains through the end…
- Categories Equities, Factors, S&P 500 & DJIA
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GICS’ Silver Jubilee
The Global Industry Classification System (GICS®) celebrated its 25th birthday in August 2024. Jointly maintained by S&P Dow Jones Indices (S&P DJI) and MSCI, GICS offers a common way to talk about market segments and their respective performances. GICS primarily uses revenues to group companies according to their principal business activities, with earnings and market…
- Categories Equities
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- Equities
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Beyond Diversification: U.S. Equity and Sector Relevance in Mexico
Many investors tend to overweight domestic equities, a phenomenon known as home bias. Mexican investors may be inadvertently neglecting the breadth of global equity markets by focusing primarily on local options. The significant representation of the U.S. equity market means that some investors risk overlooking a significant portion of the global equity market and the…
- Categories Equities
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- Equities
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Explaining Changes to Select Sector Indices
Launched in the late 1990s, the Select Sector® indices measure the performance of S&P 500® sectors; each S&P 500 company is assigned to one of the 11 Select Sector indices, based on the Global Industry Classification Standard (GICS®) framework. The indices serve as the basis for an ecosystem of financial products, which in turn allow…
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The Sector Effect during U.S. Presidential Election Years
History suggests that sectors have a greater potential to over- and underperform during U.S. presidential election years. Join S&P DJI’s Ed Ware, Anu Ganti and Hamish Preston for a closer look at some of the drivers behind election years’ tendency to offer greater sector outperformance opportunities than non-election years.
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Frequent Flyers
Planes are interesting places, airborne aluminum tubes stuffed with strangers from all walks of life, including seatmates prodding with the proverbial ice-breaker, “So, what do you do?” Overhearing many such conversations, I’ve found complicated job descriptions elicit blank stares and subsequently lead to higher-level answers such as “Well, I’m in tech,” or “I work in…
- Categories Equities
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- Equities
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U.S. Sector Relevance to China
Chinese investors tend to exhibit high exposures to domestic equities. Incorporating U.S. equities could help Chinese investors diversify their strategies and alleviate home-country bias. For example, the S&P 500® may be relevant for exposure and sensitivity to the U.S. economy. Additionally, market participants seeking to offset domestic equity biases or express tactical views may wish…
- Categories Equities
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Disentangling Diversification
We frequently hear that “it’s a stock picker’s market.” The recent market environment could equally well be characterized as a sector picker’s market. To measure the importance of sectors, we decompose total market dispersion into within-sector and cross-sector effects. Exhibit 1 shows that the contribution of cross-sector effects to total S&P 500® dispersion has trended…
- Categories Equities, S&P 500 & DJIA
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- Equities, S&P 500 & DJIA
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Equally Weighting within Sectors: Impact and Potential Applications
The outperformance of equal weight indices is well documented, especially for the S&P 500® Equal Weight Index’s 20 years of live history. Equal Weight’s relative returns reflect the impact of several important index characteristics. For example, smaller-size exposure and (anti-) momentum effects together account for around 75% of the historical variation of its relative returns….