In an earlier post, we noted some of the recent changes in sector weightings; namely those of Energy, Financials, and Technology. Whereas Energy and Financials stood as the bulk of the weight of the S&P 500 back in the mid-2000s, since the Financial Crisis, the Tech sector has stolen share away. The COVID era has only exacerbated this trend as Energy and Financials’ combined weighting has completely diverged from that of Technology. While Technology currently accounts for 27.37% of the S&P 500, Energy and Financials together now account for only 12.28%. These two sectors combined for a weighting of more than 32% at their peak just before the Financial Crisis!
As shown below, for Technology, only the late 1990s/early 2000s has seen higher readings and there is basically no historical precedent (since at least 1990) for the low weighting of Energy and Financials. As for the spread between the combined weightings of Energy and Financials versus the weighting of Technology, only 2000 has seen similar readings to current levels (currently ~15). Click here to view Bespoke’s premium membership options for our best research available.