April Sector Shifts

The S&P 500 had great back-to-back months with the index up 4.24% in March and up 5.24% in April. Plus, every sector, style, and size index on this chart had positive absolute returns. However, there were significant shifts in leadership during the period.

The chart highlights relative returns versus the S&P 500 for March (x-axis) and April (y-axis). While Value had generally outperformed since last fall and again in March, Growth beat value in April. Energy had been a driver of value and outperformed earlier in the year but underperformed in both March and April (lower left quadrant). Small-caps, as represented by the Russell 2000 index, exhibited a similar pattern.

Financials continued their relative strength and were joined by Real Estate (upper right quadrant); both outperformed in March and April. The Technology sector relative strength paused earlier this year and again in March but kept pace with the S&P 500 in April.

Can Growth hold on to leadership or will high vaccination rates, improving economy, and higher interest rates shift leadership back to Value?