U.S. Stock Market Sector Weightings

The table below lists the historical sector weightings of the U.S. stock market. The weights have been calculated using the 500 largest public companies at a given date. Currently (6/30/2020), clearly the largest GICS sector is Information Technology, followed by Health Care and Consumer Discretionary companies. Note: Telecommunications sector was replaced by the new Communication Services sector after the market closed on September 28th, 2018. Real Estate was separated from Financials and promoted as its own GICS sector after the market closed on August 31st, 2016.

For comprehensive historical data, check the Global Equity Valuations Researcher Dataset by Siblis Research.

U.S. Stock Market (Large Cap) – GICS Sector Weightings

GICS Sector 6/30/2020 12/31/2019 12/31/2018 12/31/2017 12/31/2016 12/31/2015
Communications 10.78% 10.39% 10.13% - - -
Consumer Discretionary 10.83% 9.75% 9.94% 12.21% 12.03% 12.89%
Consumer Staples 6.97% 7.21% 7.42% 8.20% 9.37% 10.05%
Energy 2.82% 4.35% 5.31% 6.08% 7.56% 6.50%
Financials 10.09% 12.94% 13.30% 14.79% 14.81% 16.48%
Health Care 14.63% 14.20% 15.54% 13.78% 13.63% 15.17%
Industrials 7.99% 9.05% 9.20% 10.27% 10.27% 10.05%
Information Technology 27.47% 23.20% 20.12% 23.78% 20.77% 20.69%
Materials 2.52% 2.66% 2.73% 2.99% 2.84% 2.76%
Utilities 3.07% 3.32% 3.34% 2.94% 3.17% 2.99%
Real Estate 2.84% 2.93% 2.97% 2.89% 2.89% -
Telecoms (discont.) - - - 2.06% 2.66% 2.43%

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Changes in the Sector Weights During the Past 10 Years

Since 12/31/2006, the weighting of the financial sector has decreased considerably. The global financial crisis of 2008 dropped the weight of the sector temporarily to just 11%. Financial services recovered quickly after the crisis but the sector is still much smaller compared to other sectors than it was before the crisis. Information technology sector has risen with the help of Apple, Microsoft, Facebook and Alphabet from 15% to over 20%. Since 2009, the weight of energy sector has halved and its currently just a bit more than 6%. The sharp decrease in oil prices has caused big worries for energy companies. In the beginning of 1980, energy was clearly the largest sector, making up 25% of the US stock market. Also material companies are now just a fraction of what they used to be 35 years ago.

The Performance of Different Sectors

A lot of research has been made about the performance and returns of different sectors. During 2014 the stock market was booming but the growth was halted in 2015. Between January and October 2015, majority of the sectors have been generating negative returns. From the sectors, energy companies have had the worst year, generating negative return of 13.7%. Materials sector is also down 9.2% and utility companies have lost 7.3% of their value. The only sector with any gains is consumer discretionary that is up 7.7%.

But if the performance is examined for the past five years, all the sectors have been generating positive returns. Both healthcare and consumer disc. sectors have gained over 120%. The worst sector is again energy companies whose value has increased only 18% during the past five years.

The Difference Between Consumer Staples & Consumer Discretionary Sectors

Consumer discretionary companies are selling nonessential goods and services. The businesses include car manufacturers, high-end clothing, media, hotels, and luxury goods. Consumer staples corporations sell products that people are unable (e.g. food, beverages, household items) and unwilling (e.g. tobacco) to stop consuming. Consumer staples businesses are considered non-cyclical and the demand for these products is expected to be much more staple as the consumer discretionary goods.

Global Industry Classification Standard (GICS) System

The weightings are based on the Global Industry Classification Standard, an industry taxonomy developed by Standard & Poor’s together with MSCI. In addition to the ten main sectors, the system has 24 industry groups, 67 industries and 156 sub-industries. Other classification systems include The Industry Classification Benchmark (ICB) developed by by Dow Jones and FTSE and The Standard Industrial Classification (SIC) created by the US government.

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