SPDR Sector ETFs
SPDR offers a wide range of UCITS compliant Sector ETFs covering World, Europe and US exposure. With over $160 Billion AUM, SPDR is a global leader in sector investing.
Quarterly Sector & Equity Compass
Q4 Sector & Equity Compass
Our quarterly Sector & Equity Compass provides investors with an overview of recent sector performance and flows, and also features our Sectors Picks for the quarter ahead.
Sector & Equity Compass Q2 2023
Our quarterly Sector & Equity Compass provides investors with an overview of recent sector performance and flows, and also features our Sectors Picks for the quarter ahead.
Q2 Sector Picks
Our Quarterly Sector Picks
To activate our quarterly picks, visit the relevant fund pages.
World
Europe
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.
The Basics of Sector Investing
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
Track record in managing indexed sector strategies 3
Amount in Sector strategies 3
Number of countries 3
Related Content
Traditional theory suggests there are four stages of the business cycle: recovery, expansion, slowdown and contraction. In this paper, we provide a long-term analysis of European business cycles and their impact on sectors, smart beta factors and fixed income. We believe the lessons gleaned can help to inform asset allocation decisions.
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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.