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.