US Sector Performance using Equal-Weighted Sector ETFs

2022年4月2日

This chart shows sector performance over the last year, 4/2021 to 4/2022. The chart uses a weekly timeframe and compares equal-weighted sectors. Many major indices and ETFs are skewed given heavy weightings in technology, consumer discretionary, and communications mega-cap stocks (mostly the FAANG stocks and MSFT and TSLA).

A few other observations that are readily apparent from this sector comparison:

1. Energy's has been extraordinary in its outperformance.
2. Real Estate's outperformance makes sense given given the inflationary fears that materialized into high inflation rates over the past year.
3. Utilities, Healthcare and Staples have been outperforming, especially lately especially over the past 1-2 months, which confirms the defensive posture of the market recently and over the past year. This defensive outpeformance suggests that markets are not fully in risk-on mode despite the powerful 2-week rally that occurred in 2H March 2022.
4. The prominent underperformers have been Consumer Discretionary and Communications Services. (Meta Platforms (FB) is the top component of Communications services, and it has been in a sharp downtrend since September 2021.

Charts like this help a trader view where the money is flowing in the broader markets without the analysis being distorted by overweighting in FAANG names.

2022年4月2日

ノート

Here is the daily chart with the same sector relative performance. The daily chart goes back to the start of 2022, but it can be scrolled further back. The defensive sectors' outperformance—even during this recent rally in 2H March—shows that all is not well yet in the broader markets, and rallies back to all-time highs are less likely.