Diversification Opportunities in Equity Sectors

To help manage risk, investors often evaluate a portfolio’s level of diversification by analyzing stocks according to their market capitalization or investment style. Diversification* may also be achieved by including a mix of investments in different sectors or industries. Similar to market capitalizations and investment styles, sectors have moved in and out of favor, as demonstrated in the chart below. During volatile markets, being mindful of a portfolio’s sector allocation may help manage risk while being positioned to potentially benefit from market trends. Talk to your financial advisor today regarding sector diversification opportunities and the potential for lower portfolio risk.

Sector Annual Returns (As of 12.31.2023)

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Legend and Index Definitions

 
 

Source: Standard and Poor's. Past performance does not guarantee future results. The illustration is not representative of any Guggenheim Investments product. Some investment products have more risk than others. There are additional risks associated with investing in consumer discretionary, consumer staples, energy, financials, healthcare, industrials, information technology, materials, telecommunications and utilities stocks. Index information is provided for illustrative purposes and is not meant to represent the performance of a fund. Referenced indices are unmanaged and not available for direct investment. Index returns do not reflect any management fees, transaction costs or expenses. *Diversification neither assures a profit nor eliminates the risk of experiencing investment losses.

Sector Risk/Reward Profile (12.31.2011–12.31.2023)

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As illustrated in the chart below, sectors focus on a single aspect of the market and tend to be volatile as they move in and out of favor.

 



 

Source: Standard and Poor's for annualized index performance.

Past performance does not guarantee future results. The illustration is not representative of any Guggenheim Investments product. Some investment products have more risk than others. There are additional risks associated with investing in Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Information Technology, Materials, Telecommunications and Utilities stocks.

*Standard deviation is a measure of historical volatility that indicates a degree to which an investment’s returns fluctuate around its average return. Generally, a higher standard deviation indicates a more risky investment.

S&P 500® (Economic Sectors) Index is a capitalization-weighted index. The Index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Index was developed with a base level of 10 for the 1941–43 base period.

This information is intended to be general in nature and should not be construed as investment advice or a recommendation of any specific security or strategy. The index returns used to calculate the correlations do not reflect any management fees, transaction costs, or expenses. The indices are unmanaged and are not available for direct investment. Index information is provided for illustrative purposes and is not meant to represent the performance of a fund.

Guggenheim Investments represents the investment management businesses of Guggenheim Partners, LLC ("Guggenheim"). Securities offered through Guggenheim Funds Distributors, LLC. Guggenheim Funds Distributors, LLC is affiliated with Guggenheim Partners, LLC.

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