Monday, September 05, 2011

S&P 500 Sector SPDRs - historical sector weights

Here's an interesting way of looking at sector weights, and their relative performance.  It's easy to do - just take the 9 sector SPDR ETFs, one for each sector, and divide each by the sum of all 9.  The graph shows the history of this since 1999.  This analysis leaves out dividends (which I know is not fair, since sectors like Utilities may have disproportionate dividends), but it gets the idea across.

It's interesting to note that the dot-com bubble burst when the XLK (tech sector) was around 25% of the sum... XLE has been having trouble breaking that 25% range as well in more recent years.  Although there's nothing magic about 25%, I wonder if that range is where a sector gets too big for the overall economy to support it?

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