All S&P 500 Sectors and Industries, by Size
The S&P 500 is one of the most widely quoted stock market indexes, but do you know how it’s comprised?
All of the S&P 500 Sectors and Industries, by Size
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The S&P 500 is one of the most widely quoted stock market indexes, but do you know how it’s comprised? From soft drinks to semiconductors, the benchmark index tracks an extremely wide variety of industries across the U.S. economy.In this Markets in a Minute chart from New York Life Investments, we show every sector and its underlying industries by size.
A Sector View
At a high level, the S&P 500 tracks broad segments of the economy known as sectors. Here’s how the percentage allocation in the index breaks down:
Information technology, which makes up almost 28% of the index, has outperformed other sectors by a wide margin so far in 2020. At the other end of the spectrum, real estate, materials, and energy each make up less than 3% of the index.
Diving Deeper: An Industry View
While investors are likely familiar with sectors, the specific underlying industries may be lesser known. Below is a complete industry breakdown of the S&P 500.
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In total, the S&P 500 tracks 126 industries, and each one presents unique risks and opportunities.
Biotechnology, which focuses on novel drug development and clinical research for treating diseases, has gained renewed interest during the COVID-19 pandemic. While successful drugs can offer high potential returns, about 90% of clinical programs ultimately fail. Investors can screen potential companies for various factors including corporate sponsor support, ample long-term funds, and a pipeline with more than one product.
Another example is aerospace and defense. Due to the high barriers to entry and significant funding from the U.S. government, this can be an attractive industry for investors. However, it can be impacted by the current government’s defense policies. For example, the aerospace and defense industry performed well after President Donald Trump was elected, and it may be influenced by the November 2020 election results.
The Big Picture
With a full view of the S&P 500 sectors and industries, investors can get a better idea of the opportunities within U.S. large cap stocks. However, it’s worth noting that it is not possible to invest directly in an index. Investors can put funds in these industries by purchasing stocks directly, or through managed products such as ETFs and mutual funds that track index performance.
By exploring every corner of the economy, investors can take advantage of growth potential in various areas—not just those trending in the news cycle.