After a 21.7% return for the US large cap Russell 1000 Index in 2017 in which all but one sector had positive returns, 2018 has been more of a mixed bag with sector returns. The Index has a return of -0.7% in 2018 (as of March 22) amid heightened market volatility, rising interest rates and growing global trade concerns, with more mixed returns across sectors.
Thus far in 2018, the US large cap Technology (+4.8%) and Consumer Discretionary (+2.5%) sectors have continued continued their positive performance from 2017, with the Financial Services sector off just slightly (-0.3%). The Consumer Staples (-9.4%), Utilities (-6.2%) and Materials & Processing (-5.3%) sectors have turned negative in 2018 after posting positive returns last year.
Joe Sullivan, director, Interactive Brokers Asset Management:
“Some sectors can significantly under-perform the overall market when volatility is high. These are situations where utilizing investment strategies that provide the opportunity for broad-based and diversified sector exposure can be can be beneficial long-term.”
Rolf Agather, managing director, North America research, FTSE Russell:
“Market indexes can be a very useful tool for investors to measure and compare performance across global asset classes and markets. This is particularly true in the case of market sectors, which clearly fluctuate in performance over time as demonstrated in Russell 1000 Index sector returns in 2018.”
Interactive Brokers Asset Management currently offers a suite of index-tracking portfolios to separately managed accounts, based on Russell 1000 Index sectors.
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