XLK - 11 Sectors 3 Different Stories For The S&P 500 And IVV
2024-02-20 09:00:00 ET
Summary
- The 11 sectors within IVV and thus within the S&P 500 index, can be grouped into 3 different tiers when it comes to their weightings.
- Top 5 sector weightings in the S&P 500 are expensive on at least one measure, while bottom 5 are not.
- One sector, industrials, is in the middle but shows potential as a source for new stock ideas.
When an investor hears "S&P 500" they may think of a variety of things. I know I do. But I suspect for many investors, they just think of that wildly popular index, performance benchmark and the first-ever and biggest ETF, the iShares Core S&P 500 ETF ( IVV ). But the S&P 500 and IVV are actually just the front-facing view of a house, so to speak.
Inside that house is a very detailed group of subsets that investors can use to create an infinite variety of portfolios. In the current "Magnificent 7"-dominated market, that ability to get creative, lower portfolio correlation to broad markets through diversification and discover long-term value in different market segments is understandably underestimated. After all, why not just buy what's going up?...
11 Sectors, 3 Different Stories For The S&P 500 And IVV