Investment Ideas

SPDR Sector ETFs

Sector Compass

Quarterly sector compass

Q4 Sector Compass

Our quarterly Sector Compass provides investors with an overview of recent sector performance and flows, and also features our Sectors Picks for the quarter ahead.

Read the quarterly Sector Compass

September Monthly Update

Download our short monthly update on flows and sector performance.

Download the monthly update

Q4 Sector Compass Webcast

Want to know more? Join Rebecca Chesworth, Senior SPDR Equity ETF Strategist at State Street Global Advisors and Chris Bennett, Director, Index Investment Strategy from S&P Dow Jones Indices to hear where assets have flowed over the past quarter and what sectors might be worth watching through the US election and beyond.

Listen to the webinar replay

Q4 Sector Picks

Our Quarterly Sector Picks

To activate our quarterly picks, visit the relevant fund pages.

Sector rotation model

Sector Rotation: More Than Just Price Momentum

Sector rotation strategies often rely on one indicator: price momentum. In a new research paper our strategists examine a sector rotation strategy that uses a blend of parameters.

Results show that the sector rotation strategy beat its respective benchmarks across all regions over the entire period, and with diminished volatility.

Read the Research Paper

US Presidential Election and Sector Implications

What might happen in November 2020?

Elliot Hentov, Head of Policy Research talks about the upcoming US presidential election and the implications for sector investing.

Demographic Trends and Sector Impact

Which demographic shifts should investors monitor?

Amlan Roy, Head of Global Macro Policy Research discusses demographic trends and their impact on sectors.

Getting Active with Sectors

Harness the Power of Sector ETFs

What’s the role of sector indices in risk, pricing and active returns? S&P DJI’s Tim Edwards joins Rebecca Chesworth of SPDR ETFs to explore how and why some investors are getting active with sectors.

Around half of variation in stock returns can be attributed to sector trends.

Tim Edwards, S&P Dow Jones Indices, Sector Effects in the S&P 500®, March 2019.

The Basics of Sector Investing

Related Content

Selective market exposure

Sectors allow targeted exposure to capture opportunities in market (be it sentiment, macro factors, themes, style). Across a fund range there is also the ability to play different parts of the business cycle in different regions, e.g. US vs. Europe.

Dispersion between sector returns

Dispersion of returns is a defining characteristic of sector investing. As different sectors have different drivers, their returns will diverge over a given period. According to S&P, the dispersion between sector returns accounts for roughly half of the dispersion between stock returns. This implies that half of the value added from picking stocks could be achieved with selecting the right sectors.

Risk Management

Diversification of risk¹ Sector investment offers a lower concentration risk than individual stocks and helps avoid idiosyncratic risk associated with individual stocks.

Varied correlations between sectors Each sector has a different correlation with the overall market. Taking advantage of these differences could reduce risk in a portfolio.

Idea Implementation

Because sectors comprise companies with the same economic activities, there are often style characteristics in common. This knowledge can be utilised to implement an investment view, particularly related to macroeconomic factors.

Implementing Sector Investing

Harnessing the Power of Sector Investing Through ETFs

Investing in sectors can align portfolios with broader market trends, giving exposure to specific factors and styles.

Sectors are particularly well suited to target certain economic variables and, when accessed through ETFs, investors can implement macroeconomic views simply and cost-effectively.²

Sectors offer a selective exposure with opportunities to potentially benefit from significant return dispersion
Investing in sectors can provide a better means of capturing thematic trends than individual stocks
ETFs are attractive tools for implementing economic and broader market views

Related Content

Experience 24 Yrs

Track record in managing indexed sector strategies ³

Assets managed $170 BN

Amount in Sector strategies ³

Countries covered 40

Number of countries ³

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Fund information

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¹ Diversification does not ensure a profit or guarantee against loss.
² Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.
³ Source: State Street Global Advisors, as at 31 December 2019.

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