While it’s impossible to know what the future performance of an exchange traded fund (ETF) will be, looking at the past can show us important educational trends. Remember though that past performance is not necessarily indicative of future results.

For example, let’s look at the S&P 500’s performance versus the different sectors’ performances within the index.

As we can see from the chart by James Picerno of The Capital Spectator, the energy sector wins; it’s up about 25% compared to the S&P 500 that is up almost 10%. The energy sector makes up 11% of the SPDR (SPY), which tracks the S&P 500. The Energy Select SPDR (XLE) is the index that tracks the energy sector.

Perhaps what is more interesting, is when you look at the sectors’ sizes.

It’s surprising that financials, which makes up 21% of SPY and is the largest market-cap sector, has the worst performance. Yet, basic materials, which makes up only 13% within SPY and is the smallest market-cap sector, is the second highest performer. Materials Select Sector SPDR (XLB), which is the index that tracks the basic materials sector, is up 23%. Financial Select Sector SPDR (XLF), which is the index that tracks the financials sector, is down 0.1% year-to-date.

These figures remind us that big players in various sectors don’t guarantee stellar performances.

Tags: Energy, Financial, GUR, Material ETFs, Sector ETFs