Sector Performance Via Market Capitalization (Current Bull Market)
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View from the Observation Deck  

  1. From 3/9/09 through 3/5/19 (current bull market), small-capitalization (cap) stocks outperformed both mid- and large-cap stocks, as measured by the S&P 500 Index, S&P MidCap 400 Index and S&P SmallCap 600 Index (see "Index" line in table).
  2. We are encouraged by the fact that small-cap stocks have outperformed mid-cap stocks, which in turn have outperformed large-cap stocks, because it indicates that the traditional risk-return dynamic  (the greater the risk taken the greater the return expected) is alive and well.
  3. Sector performance can vary widely by market cap and several of the sectors reflect a huge disparity in performance. A quick glance at the returns in the table should at the very least help the average investor appreciate the merits of asset allocation and diversification, in our opinion.
  4. The S&P 500 Index had six sectors (Communication Services, Consumer Discretionary, Energy, Financials, Information Technology and Real Estate) post the highest cumulative total returns, by market cap, for the period captured in the table. The S&P MidCap 400 Index had three (Industrials, Materials and Utilities) top-performers, while the S&P SmallCap 600 Index had just two (Consumer Staples and Health Care).
  5. Click here to see how investors have their capital allocated by market cap and style. 

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 a capitalization-weighted index comprised of 500 stocks (currently 505) 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 S&P 500, S&P MidCap 400 and S&P SmallCap 600 Sector Indices are capitalization-weighted and comprised of S&P 500, S&P MidCap 400, and S&P SmallCap 600 constituents, respectively, representing a specific sector. The S&P Composite 1500 Index is comprised of the S&P 500, S&P MidCap 400 and S&P SmallCap 600 Indices. 

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Posted on Thursday, March 7, 2019 @ 1:44 PM

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.