Sector Relative Returns

Sector leadership has changed in recent months. Some attribute the shift to positive news on the vaccine front since the election but the growthy names began losing some relative momentum earlier in the fall.

The ratio of the S&P 500 growth vs. value indices peaked on September 1st and has plateaued since. I created the chart to highlight the relative performance of the S&P Sectors (blue dots) and the Growth (green) and Value (orange) styles. Each dot represents the relative performance vs. the S&P 500 for two periods, March 31 to August 31 and from August 31 to November 18.

For instance, Technology outperformed by 18.2% through the summer but underperformed by 4.6% since 8/31 (lower right quadrant). All sectors had positive absolute performance in the first period and the S&P 500 was up 35.4%. Energy and healthcare underperformed in both periods (lower left). Of interest is that the consumer discretionary sector outperformed in both periods as Amazon and Home Depot reside in that sector.

Will value and related sectors build upon their recent relative performance or will growth recapture the lead? More to ponder. Happy Thanksgiving!