We are only three weeks into the new year, and we have already seen some huge moves in markets. This has been called the great rotation trade and it can be illustrated by looking at the divergent performance of the 11 sectors of the S&P 500 as we look at the performance of the ETFs which track these sectors.

Name of Sector Symbol of ETF 2022 YTD Performance (%)
Energy XLE +16.7%
Communication Services XLC -2.64%
Real Estate XLRE -7.43%
Utilities XLU -4.21%
Healthcare XLV -6.18%
Industrial XLI -1.12%
Consumer Staples XLP -1.54%
Materials XLB -3.29%
Consumer Discretionary XLY -5.59%
Technology XLK -6.95%
Financial XLF +2.23%

As of close of business on 18 January 2022.
A few key issues stand out

  • While the overall market is lower there has been a great rotation within sectors.
  • The rotation has been from aggressive sectors to defensive and from “growth” to “value”.
  • Energy has been the clear winner but most other sectors lower with the worst being Real Estate, Healthcare,
    Technology and Consumer discretionary.
  • Financial has been boosted because the largest weighting (13%) in the sector is Berkshire Hathaway which is rightly
    perceived as a defensive and value play due to its fortress balance sheet.
Latest Update: Jan 27, 2022