As you are more than likely already aware, August has historically not been the best month of the year for equity bulls. Going back to 1990, the S&P 500 has averaged a decline of 0.82% with positive returns just 56% of the time. Like the overall market, practically every sector has also been underwater for the month. The chart below summarizes the historical average returns for the S&P 500 and each of the ten sectors going back to 1990. As shown, the only sector that has averaged a gain during the last full month of summer has been Utilities (+0.58%). Behind Utilities, the three sectors that have seen the smallest declines are Consumer Staples (-0.09%), Health Care (-0.22%), and Technology (-0.23%). On the downside, Telecom Services (-1.96%) has been the weakest sector, but thankfully it is also the smallest sector with just a handful of names. After Telecom Services, the next two worst performing sectors are Materials (-1.33%) and Financials (-1.25%).
Looking at average returns by sector doesn’t necessarily tell the whole story, though. Due to some years that saw big declines, the averages above are a little bit skewed. To help avoid that distortion, the chart below shows median sector returns since 1990 (sorted in the same order as the sectors above. On a median basis, the S&P 500’s return is a much more respectable +0.49%. In terms of sectors, Utilities (+0.89%) are still the best performing sector, but they aren’t the only one with positive returns. On a median basis, Financials (+0.78%) see their position move from the third worst performing sector to the second best. Additionally, Health Care (+0.76%) and Consumer Staples (+0.74%) both see their median returns flip to positive even though their averages are negative.