Sector winners coming out of March's 35% stock market decline - The Average Joe


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    Sector winners coming out of March’s 35% stock market decline


    May 14, 2020


    The S&P 500, the most widely used stock index in the U.S. dropped 35% in March.

    • COVID Sector Winners (total returns March 18 – May 12): Energy (+54.9%), Tech (+36.9%), Healthcare (+35.2%), Materials (+33.2%), Consumer Discretionary (+30%)


    We analyzed the returns of the S&P 500 index, a basket of stocks that represent the largest 500 companies in the US across all sectors. Within the S&P 500 are smaller indexes that track the performance of different sectors. We examined the performance of sectors of the S&P 500 (recession vs. last (2008) and here is what stands out:

    Energy Sector (TOP PERFORMER during COVID vs. MEH during 2008)

    • The sell-off in energy stocks was seen as overly excessive during March and as a result, had the most to gain when markets started recovering. People viewed energy stocks as undervalued.

    Technology Sector (2ND PLACE during COVID vs. 4TH PLACE during 2008)

    • Tech stocks have proven themselves to be resilient crash after crash. Technology has become incredibly embedded in our daily lives and a critical part of the economy.

    Healthcare Sector (3RD PLACE during COVID vs. NOT SO GREAT during 2008)

    • No surprise that healthcare has been performing well with the whole world racing to find a cure.

    Financial Services (9TH PLACE during COVID vs. TOP PERFORMER during 2008)

    • Fear and anxiety of mass business bankruptcies and the trickle effects on the financial sector remain.


    Several industries have regained the majority of their losses but lagging industries present a long term holding opportunity. Financial Services, Utilities, and Industrials have seen a slow recovery and are a long way from their market highs. These Exchange Traded Funds (ETF) may offer undervalued opportunities for investors.

    PRO TIP: Exchange Traded Funds offer a diversified way to invest in a group of stocks or assets. These are traded exactly like stocks.

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