Sector Performance Via Market Capitalization (Since Trump Was Elected)

Bob Carey
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Sector Performance Via Market Capitalization (Since Trump Was Elected)

Posted Under: Sectors

View from the Observation Deck

The three major indices featured in the table comprise the S&P Composite 1500 Index, which represents approximately 90% of total U.S. equity market capitalization (cap), according to S&P Dow Jones Indices.
Large-cap stocks, as measured by the S&P 500 Index, have significantly outperformed their mid- and small-cap counterparts, as measured by the S&P MidCap 400 and S&P SmallCap 600 Indices, since Donald J. Trump was elected four years ago.
When calculating the total returns on an average annualized basis (returns in table are cumulative), the S&P 500, S&P MidCap 400 and S&P SmallCap 600 Indices returned 14.89%, 8.76% and 7.38%, respectively, according to Bloomberg.
For comparative purposes, from 1926 through 2019 (94 years), data from Morningstar/Ibbotson Associates indicates that the S&P 500 Index posted an average annual total return of 10.20%, while the Ibbotson® Small Company Stock Index returned 11.91% on average.
With respect to large-caps, the top-performers by far were Information Technology and Consumer Discretionary. As it turns out, these two sectors were the beneficiaries of the shelter-at-home response to the COVID-19 pandemic, in our opinion.
Sector performance can vary widely by market cap. Consumer Staples appears to have the least amount of disparity in performance across the three market caps (see table). Communication Services stands out for its poor showing in the S&P MidCap 400 Index. Keep in mind, there are only 10 constituents in that sector.
As of the close of trading on 11/4/20, the S&P 500, S&P MidCap 400 and S&P SmallCap 600 Indices stood 3.84%, 5.90% and 17.19% below their respective all-time highs, according to Bloomberg.

This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. Investors cannot invest directly in an index. The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance. The S&P MidCap 400 Index is a capitalization-weighted index that tracks the mid-range sector of the U.S. stock market. The S&P SmallCap 600 Index is a capitalization-weighted index that tracks U.S. stocks with a small market capitalization. The 11 major sector indices are capitalization-weighted and comprised of S&P 500, S&P MidCap 400 and S&P SmallCap 600 constituents representing a specific sector.

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Posted on Thursday, November 5, 2020 @ 1:19 PM • Post Link

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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

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