View from the Observation Deck
1. Today's blog post is for those investors who want to drill down below the sector level to see what is performing well in the stock market.
2. Equities are off to a rough start in 2022. The subsectors in the chart above offer proof that equity investors can prosper even when the major broader market indices are down.
3. The S&P 500 Index is currently comprised of 11 sectors and 123 subsectors, according to S&P Dow Jones Indices.
4. As indicated in the chart above, Energy and Consumer Staples had five and four subsectors, respectively, on the list. All five subsectors that comprise the energy sector made the list. Materials, which are cyclical in nature, could potentially benefit over time from the robust inflationary climate, in our opinion.
5. As of 5/31/22, the most heavily weighted sector in the S&P 500 Index was Information Technology at 27.1%, according to S&P Dow Jones Indices. Energy and Consumer Staples came in at 4.8% and 6.5%, respectively.
6. The 15 top-performing subsectors in the chart posted total returns ranging from 14.39% (Tobacco) to 62.82% (Oil & Gas Exploration & Production).
7. With respect to the 11 sectors, only two of them posted positive total returns for the period captured in the chart. Energy and Utilities were up 58.43% and 4.65%, respectively, on a total return basis, according to Bloomberg. The third-and fourth-best performers were Consumer Staples and Materials, with total returns of -3.16% and -4.72%, respectively. The S&P 500 Index posted a total return of -12.76% for the period.
8. There are a growing number of packaged products, such as exchange-traded funds, that feature S&P 500 Index subsectors.