The share market sectors that offer the best and worst performance for investors

Credit: Horten123

The lacklustre performance of the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) for the year to date is not what many investors would have predicted at the start of 2015. Investors who have tracked the broad index have seen a decline of more than 7% since the start of the year and it is unlikely that the index will end in positive territory for 2015.

It is interesting to note that companies in the ASX 200 index are classified broadly into 11 main sector indices, each of which have a different weighting on the overall market.

Here is a list of each sector index and how they have performed year to date, ranked from best to worst (figures sourced from Google Finance):

1. S&P/ASX 200 Utilities (Index: ^AXUJ) (ASX:XUJ) +13.2%

The utilities sector is generally viewed as a defensive sector and one investors flock to in times of uncertainty. The consistent and reliable earnings profile of many companies in this sector means it is a favourite of risk averse investors looking for above average dividend yields. AGL Energy Ltd (ASX: AGL) has been the star performer in the sector with its share price increasing by more than 25% in 2015.

2. S&P/ASX 200 Health Care (Index: ^AXHJ) (ASX: XHJ) +9.7%

This traditionally defensive sector has once again outperformed the broader market. Some of the best performers for the year include Ramsay Health Care Limited (ASX: RHC), Sirtex Medical Limited (ASX: SRX) and CSL Limited (ASX: CSL). Many companies in this sector have global exposure and a lower Australian dollar has helped to boost earnings.

3. S&P/ASX 200 Industrials (Index: ^AXNJ) (ASX: XNJ) +9.2%

The industrials index is made up from a wide range of businesses that generally outperform during the upswing of the economic cycle and struggle during economic downturns. Some of the well known companies that make up the index include SEEK Limited (ASX: SEK)Qantas Airways Limited (ASX: QAN) and Brambles Limited (ASX: BXB). It also includes some of the best performing infrastructure stocks including Transurban Group (ASX: TCL) and Sydney Airport Holdings Ltd (ASX: SYD).

4. S&P/ASX 200 A-REIT (Index: ^AXPJ) (ASX: XPJ) +6.85%

The A-REIT sector is made up of property trusts and its performance is usually independent of the broader equity market. It is interesting to note that Scentre Group Ltd (ASX: SCG) and Westfield Corp (ASX: WFD) make up nearly 40% of the total index weighting.

5. S&P/ASX 200 Consumer Discretionary (Index: ^AXDJ) (ASX: XDJ) +6.07%

Some of the well known stocks that make up this sector include Flight Centre Travel Group Ltd (ASX: FLT), Harvey Norman Holdings Limited (ASX: HVN) and JB Hi-Fi Limited (ASX: JBH). This sector is usually one of the least defensive in nature and companies usually benefit the most when economic activity is buoyant. In 2015, companies exposed to the housing market have performed well.

6. S&P/ASX 200 Information Technology (Index: ^AXIJ) (ASX: XIJ) -0.3%

It is interesting to note that only six companies in the ASX200 are classed in the information technology index. Altium Limited (ASX: ALU) and Technology One Limited (ASX: TNE) have been the best contributors to the index in 2015 but Australian investors will usually need to look beyond the index and abroad for the best opportunities in this market. The main detractor has been Computershare Limited (ASX: CPU).

7. S&P/ASX 200 Financials excluding A-REITs (Index: ^AXXJ) (ASX: XXJ) -6.25%

The big four banks make up the bulk of the financials index with insurers and other non-bank financial institutions making up the rest. BT Investment Management Ltd (ASX: BTT), Magellan Financial Group Ltd (ASX: MFG) and Macquarie Group Ltd (ASX: MQG) have been the star performers of the index, with Australia and New Zealand Banking Group (ASX: ANZ) being the biggest drag on the index.

8. S&P/ASX 200 Telecommunications Services (Index: ^AXTJ) (ASX: XTJ) -9.4%

The 13% decline in the share price of Telstra Corporation Ltd (ASX: TLS) has more than offset the great performances of M2 Group Ltd (ASX: MTU) (+40%) and TPG Telecom Ltd (ASX: TPM) (+47%). Although there were a number of mergers and acquisitions to take place in 2015, this still wasn’t enough to get this sector in positive territory.

9. S&P/ASX 200 Consumer Staples (Index: ^AXSJ) (ASX: XSJ) -11.5%

The sector is generally considered to be the most defensive in nature but has underperformed relative to the rest of the market in 2015. It has been dragged down by the well-known issues surrounding Woolworths Limited (ASX: WOW) and the flow on effects this has had on Wesfarmers Ltd (ASX: WES)Blackmores Limited (ASX: BKL) has been the shining light in this sector, rising more than 454% in 2015.

10. S&P/ASX 200 Materials (Index: ^AXMJ) (ASX: XMJ) -23.4%

Despite a falling Australian dollar, the materials sector has performed poorly as a result of declining commodity prices globally. The biggest drags on this sector have been BHP Billiton Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG). The only bright spot for the sector in 2015 has been gold producers including Evolution Mining (ASX: EVN) and Northern Star Resources Ltd (ASX: NST).

11. S&P/ASX 200 Energy (Index: ^AXEJ) (ASX: XEJ) -34.9%

It won’t be a surprise to most investors that the energy sector has been the worst performing sector in 2015. The capitulation of the oil price has seen the energy sector pummelled and every constituent in the index has declined so far. Some of biggest detractors have included Santos Ltd (ASX: STO) and Origin Energy Ltd (ASX: ORG).

Foolish takeaway

As the various performance of each sector demonstrates, it is important for investors to be invested across a number of different sectors in order to achieve a balanced and diversified portfolio. Equally important, however, is the value of avoiding poorly performing sectors as this will help to create market-beating returns.


These 3 "new breed" top blue chips for 2016 pay fully franked dividends and offer the very real prospect of significant capital appreciation. Click here to learn more.

The report is free! No credit card required.

Motley Fool contributor Christopher Georges owns shares in Woolworths and Ramsay Health Care. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.