Sector Performance Update

The chart below shows the year to date performance of the 9 major sectors making up the S&P 500.  Each sector is represented by their related ETF. Note the outperformance of the consumer discretionary sector (symbol XLY), the industrial sector (XLI), and the financial sector (XLF).

GWM client accounts currently hold XLY, XLI, and KBE which is a banking sub-sector of XLF.

I suggest you study this chart carefully as it will be used on a regular basis.

Last month's issue of The Gerritz Letter included a discussion of our sector rotation strategy. This chart illustrates the benefit of being invested in the best performing sectors.

(Click on chart to enlarge it for easier viewing)

ETF - Exchange-Traded Fund

What Does Exchange-Traded Fund - ETF Mean?

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.

Investopedia explains Exchange-Traded Fund - ETF

Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does.

By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order.

One of the most widely known ETFs is called the Spider (SPDR), which tracks the S&P 500 index and trades under the symbol SPY.

Subscribe to Gerritz InSights by Email