Investors can capitalize on a shifting market and changing business cycles through sector-specific exchange traded fund plays.

On the recent webcast, Strategizing with Sectors, Jared Rowley, Research Strategist for State Street Global Advisors, pointed out that different sectors show varying correlations to the benchmark S&P 500 index. [Sector ETFs to Capture Cyclical Trends]

For instance, the Industrial Select Sector SPDR (NYSEArca: XLI) shows a 0.92 correlation to the S&P 500 index –  a 1.0 reading reflects perfect correlation or two securities with mirror performances. On the other hand, the Utilities Select Sector SPDR (NYSEArca: XLU) shows a 0.61 reading, the lowest correlation to the S&P 500.

Advisors may find that some sectors typically exhibit a higher correlation to the broader S&P 500, which suggests that industrials, consumer discretionary and technology sectors are better plays during a broad market rally. In contrast, sectors with lower correlations, such as health care, consumer staples and utilities, would provide a more conservative or defensive play.

Additionally, David Mazza, Head of Research of SPDR ETFs and SSgA Funds, mentioned that various sectors may also exhibit a predominant style. For instance, the Utilities Select Sector SPDR and the Consumer Staples Select Sector SPDR (NYSEArca: XLP) both show predominantly value styles, whereas the he Technology Select Sector SPDR (NYSEArca: XLK) and Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) show greater growth styles.

Due to cyclical market trends, various sectors can underpeform or outperform in a rotating business cycle. For example, Rowley identified that the Information Technology Select Sector Index was the worst performing sector in 2002 after a 39% plunge, but the sector was the best performer in 2003 after a 38% surge. In contrast, the Utilities Select Sector Index was the best performer last year after a 24% jump, but it is lagging other sectors this year after a 7% decline.

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