Tech Stocks Still Lead U.S. Sectors For 1-Year Trend

 | Jan 04, 2018 08:38AM ET

Technology shares continue to post the strongest trend performance for US equity sectors, based on a set of ETFs ranked by one-year return. Although most sectors are posting year-over-year gains, the annual pace for tech remains notable for its outsized advance vs. the rest of the field.

Technology Select Sector SPDR (NYSE:XLK) is up a strong 35.8% for the year through yesterday (Jan. 3). The current gain is close to the ETF’s highest one-year total return since the recession ended in 2009. (At one point in last year’s fourth quarter, XLK’s rolling one-year change briefly accelerated to just under 40%, a cyclical peak for the post-recession period.)

XLK’s current upside momentum for the one-year gain is well above the number-two performer: stocks in the materials sector. The Materials Select Sector SPDR (NYSE:XLB) is up 25.9% on a total return basis over the past 12 months – a solid increase, but no match for tech’s surge.

Although all but one of the 11 sectors are posting one-year gains, only five are beating the broad market, based on the SPDR S&P 500 (MX:SPY (NYSE:SPY)), which is currently posting a 22.4% total return for the trailing one-year period.

The lone sector with a negative one-year trend at the moment: telecom. The Vanguard Telecommunication Services (NYSE:VOX) was down 9.5% at yesterday’s close vs. the year-earlier level. In fact, VOX’s rolling one-year total return has been consistently negative every day since Dec. 5.