Crude oil has also had an effect on more energy-sensitive sectors, including energy and to a somewhat lesser extent, materials and industrials. These three sectors underperformed when oil prices tanked. In contrast, consumer staples, health care and consumer discretionary outperformed when crude oil returns declined in excess of 10% over a 12-month period.
When it comes to investors, Fidelity has found that a lot of people are either under- or over-exposed to specific segments of the market. In comparing 5.5 million household accounts of Fidelity customers, 47% of investors held no exposure to utilities and 42% had no exposure to telecoms. Fidelity also revealed that 86% of investors had less exposure to consumer staples than the S&P 500’s 10% tilt. Meanwhile, over 40% of investors held at last one sector position that was over 30 percentage points higher than that found in the S&P 500 Index.
To get a better sense of how the markets allocate toward the various market segments, the SPDR S&P 500 (NYSEArca: SPY) includes 20.8% tech, 15.9% financials, 14.9% health care, 12.3% consumer discretionary, 10.1% consumer staples, 10.0% industrials 7.1% energy, 3.3% utilities, 2.0% materials and 2.7% telecom.
Investors can utilize ETF options to gain cheap, efficient and easily accessible sector exposure, including:
- Fidelity MSCI Consumer Discretionary Index (NYSEArca: FDIS)
- Fidelity MSCI Consumer Staples Index ETF (NYSEArca: FSTA)
- Fidelity MSCI Energy Index ETF (NYSEArca: FENY)
- Fidelity MSCI Financials Index ETF (NYSEArca: FNCL)
- Fidelity MSCI Health Care Index ETF (NYSEArca: FHLC)
- Fidelity MSCI Industrials Index ETF (NYSEArca: FIDU)
- Fidelity MSCI Information Technology Index ETF (NYSEArca: FTEC)
- Fidelity MSCI Materials Index ETF (NYSEArca: FMAT)
- Fidelity MSCI Telecommunication Services Index ETF (NYSEArca: FCOM)
- Fidelity MSCI Utilities Index ETF (NYSEArca: FUTY)
- Fidelity MSCI Real Estate Index ETF (NYSEArca: FREL)
For more information on the market sectors, visit our sector ETFs category.