Historical S&P 500 Sector Weightings

Includes: DIA, QQQ, SPY
by: Bespoke Investment Group

Below we highlight the historical sector weightings for the S&P 500.

As shown, Technology currently has the biggest weighting in the S&P 500 at 19.2%. This is the highest weighting the Tech sector has had since the Internet bubble burst in 2000. After falling all the way down to just 8.9% at the March 2009 lows, the Financial sector's weighting in the S&P 500 now ranks second at 14.4%. Health Care, Consumer Staples, Energy and Industrials are the other four sectors with a weighting of more than 10%.

The Consumer Discretionary sector is close to 10% at 9.8%. From 1998 to 2007, the Consumer Discretionary sector was bigger than the Consumer Staples sector. When the bear market hit in 2007, Consumer Staples overtook Consumer Discretionary, but the spread has tightened to about two percentage points recently. If the bull market continues, we'll likely see Discretionary overtake Staples once again.

While the Materials sector gets a lot of attention in the media, especially because it has the gold stocks, it's important to remember that it only makes up 3.5% of the S&P 500. The Utilities sector is even bigger than Materials.

Below we highlight charts of the historical sector weightings for the S&P 500. The red line in each chart represents the sector's long-term average.

Typically, when the weighting moves well above or below the long-term average, a reversal is in the cards. We especially saw this with Technology in 2000 along with Financials and Energy in 2007. As shown in the charts, Financials, Industrials and Consumer Discretionary recently moved well below their long-term averages and then bounced higher. On the other hand, Health Care, Energy and Consumer Staples recently moved well above their averages and are currently headed lower.