With earning season now complete, it is interesting to look back at the performance of each sector to see how the market responded during August.

Sector returns for the last month and last 12 months are set out in the following chart.

august sectors Data source: Google Finance

The chart is a good reminder as to how much sector performance can vary, even over short periods. Being exposed to the best sectors or avoiding the worst makes a big difference to your returns.

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) was down over 3% during August, with 7 of the 10 sectors also trading lower. The S&P/ASX 200 Energy (Index: ^AXEJ) (ASX: XEJ) and S&P/ASX 200 Information Technology (Index: ^AXIJ) (ASX: XIJ) sectors bucked the trend, up 1.44% and 5.55% respectively.

Information technology stocks represent only a small part of the broader ASX 200 index – with around a 1% weighting spread across these 9 companies:

Altium Limited (ASX: ALU), Technology One Limited (ASX: TNE), Iress Ltd  (ASX: IRE), iSentia Group Ltd (ASX: ISD)Computershare Limited (ASX: CPU)Link Administration Holdings Limited (ASX: LNK)Aconex Ltd (ASX: ACX)Carsales.com Ltd (ASX: CAR), and Myob Group Ltd (ASX: MYO).

Computershare, the largest company in the IT sector, was one of the best performers, up 13% for the month, with the market responding enthusiastically to its earnings outlook.

Business intelligence provider, iSentia, was also a standout performer – up over 25% and reversing its recent weak performance after reporting a 23.6% jump in net profits.

Shares in Iress were up around 10%, with strong results reported for its financial technology business.

The outperformance of these stocks suggests the market had been underestimating them, and perhaps the information technology sector more broadly.

The S&P/ASX 200 Health Care (Index: ^AXHJ) (ASX: XHJ) sector was down 5% in August, however, it remains the best performing sector over the last five years.

It is interesting to note that weakness has recently emerged in the S&P/ASX 200 Telecommunications Services (Index: ^AXTJ) (ASX: XTJ) and S&P/ASX 200 Utilities (Index: ^AXUJ) (ASX:XUJ) sectors, with both these previously in high demand for their yields.

Shares in Telstra Corporation Ltd  (ASX: TLS) were down over 10% in the last month alone.

Looking back further at the last 12 months – this has been a period in which it was potentially far easier than normal to outperform the ASX 200, with the index heavily exposed to two of the worst performing sectors – financials and materials. The average price return across all sectors was 9.93% compared to a return of 5.32% for the ASX 200 due to its weighting by market capitalisation.

Foolish takeaway

While broad index funds such as Vanguard’s V300AEQ ETF UNITS (ASX: VAS) can be a great way to invest, they are heavily exposed to the financial and materials sectors – together currently representing around 60% of the fund.

Recent sector performance is a good reminder that it can be worthwhile to move beyond standard index funds for investors seeking additional exposure to increasingly important sectors, such as information technology and healthcare.

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Motley Fool contributor Matthew Bugden has no position in any stocks mentioned. The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.