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 (12/31/2020), the largest Sector is clearly Information Technology, followed by Health Care and Consumer Discretionary companies. The technology sector has been dominating the U.S. stock market ever since the financial crisis of 2007-2008 and it seems that that there is no end in sight to the sector’s bull run.
For comprehensive historical sector breakdown data, check the Global Equity Valuations Researcher Dataset by Siblis Research.
U.S. Stock Market (Large Cap) – Sector Weightings
Subscribe for the Global Equity Valuations Researcher Dataset by Siblis Research that provides historical sector weightings of the U.S. equity market since the year 1979. This datataset provides current and historical P/E (TTM) ratios, forward P/E ratios, CAPE ratios, dividend yields, market cap to GNI ratios, sector breakdowns and long-term interest rates of the largest economies and stock markets in the world. Check a sample dataset from here.
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.
Interested in doing your own analysis of U.S. stock market? Purchase the U.S. Historical Stock Returns Researcher Dataset by Siblis Research and analyze the historical performance of almost ten thousand public US companies for the past 40 years. The dataset provides adjusted share prices (total returns) on a monthly level of 9,622 individual public stocks. The dataset provides also market capitalizations of the companies so you can analyze the stock market returns by size and sector. Examine a sample dataset from here.