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Summary

  • S&P 500 is one of the best performing major equity markets thus far this year.
  • In August, utility ETFs did best.
  • Year-to-date, health care ETFs have done best.
  • Past performance is not a reliable guide to future performance.

The US S&P 500 is at record highs. It has gained 8.4% for the year through August. This is among the best performers among the major markets. Spain's IBEX 35 has performed nearly as well, and Italy's FTSE Milan Index has trailed fractionally. However, Canada's Toronto Stock Index is easily the best performer in the G7, gaining almost 15% year-to-date.

Drilling down into the US equity performance, there is a great graphic from the Macromon blog. It shows the best performing ETF sectors in August and year-to-date.

(click to enlarge)

In August, perhaps aided by the continued decline in US bond yields, utility ETFs did best. Energy ETFs may be have been dragged down by the decline in oil prices. They were the worst performers.

Consumer staples and discretionary sector ETFs did well. We are concerned that the composition of US growth may shift away from consumption in H2. The unexpected decline in July's personal consumption expenditures (-0.1% vs +0.2% consensus) may be a hint of what is to come.

(click to enlarge)

Macromon also provided a graph of the year-to-date sector ETF performance. Health care, aided arguably by the Affordable Care Act, is the best performer, rising about 15.2%. Utilities are a close second at 14%.

The laggards include consumer discretionary (~3%), industrials (~3.4%) and consumer staples (5%). Financial sector ETFs (~6.9%) also lagged behind the S&P 500.

Of course, past performance is not indication of future returns. The comparative performances may still be useful for idea generation and the detection of investment themes.

Source: Sector ETF Performances