All sectors are not created equal. Investors who seek to adapt their investment portfolio to prevailing market trends may target specific areas of market through sector-related exchange traded funds.
On the upcoming webcast, How Well Do Your Know Your Sectors?, State Street Global Advisor’s David Mazza, V.P. and Head of Research, Research Strategist Jared Rowley and Research Strategist Matthew Bartolini discuss overweight and underweight sector strategies for the coming months, along with some new sector ETF ideas.
For instance, in a low-interest rate environment, the Utilities Select Sector SPDR (NYSEArca: XLU) has been a popular play as the utilities sector produces an attractive yield, compared to the low 2.07% yields on benchmark 10-year Treasuries. XLU has a 3.61% 12-month yield. [Utilities ETFs Light Up In Erratic Q3]
XLU has also been outperforming the broader S&P 500 index as market observers anticipate the Federal Reserve will push off on its first interest rate hike in almost a decade. Over the past three months, XLU rose 4.4%, whereas the S&P 500 dipped 3.9%.
Furthermore, the Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) and Consumer Staples Select SPDR (NYSEArca: XLP) have been outperforming this year, rising 10.2% and 4.8%, respectively, while the S&P 500 Index was only up 0.4% year-to-date.