Traditionally speaking, when one is choosing to lean into a particular sector of the equity market, they’re going to want to lean into the one that’s offering the best performance.
Key Takeaways:
- While some may assume tech is the top performing sector of the S&P 500, the actual top sector is energy.
- As of the end of October, energy is up 14% across the month, and has grown 59.92% year-to-date.
- The State Street Energy Select Sector SPDR ETF (XLE) offers targeted exposure to the energy sector of the S&P 500.
If you were to ask the average person on the street what sector of the S&P 500 was doing the best on both one-month and year-to-date basis, they’d probably guess technology. However, that would be the wrong guess–energy is leading the pack on both fronts.
Earlier this month, S&P Global released a report examining how the S&P 500’s respective sectors are doing. As the report noted, the energy sector was up 14% across the month of October.
The one-month gap between the highest- and lowest-performing sectors is significant, given that the weakest monthly sector–-communication services–-was down 15.1% in October. This represents a difference of about 29% between energy and communication services, all within a singular month.
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The distance between energy and communication services grows even wider on a year-to-date basis. Energy has climbed 59.92%, whereas communication services remains the worst-performing sector, down 11.31%. That creates an immense gap of over 71% between the two.
