Connect with us

Markets in a Minute

The Top Performing Sectors in 2020, So Far



The Top Performing Sectors in 2020, So Far

After a roller coaster start to the year, which S&P 500 sectors have seen positive returns, and which are still struggling to recover?

Energy prices collapsed as historic supply excesses hurt producers, refineries, and oil futures. Meanwhile, consumer behavior trends naturally bolstered the tech sector, as demand across online services soared. At the same time, the recent bounceback appeared to have been supported by a number of economic factors. Ultra-low interest rates, liquidity stimulus, and fiscal actions all helped to spur growth in stocks.

Today’s Markets in a Minute chart from New York Life Investments draws data from the S&P 500, showing how each sector has performed year to date amid historical volatility.

Coming Out On Top

Continuing the upswing seen in prior years, the tech sector has outperformed every other sector.

S&P 500 SectorsYear to Date Price Returns*
Information Technology
Consumer Discretionary
Communication Services
Health Care
Consumer Staples
Real Estate

*as of market close June 10, 2020

As of June 11th, the S&P 500 Information Technology sector has returned 13.5% YTD. This is impressive, considering that over the last decade, the sector averaged 17% in annualized returns. It goes without saying then, that large technology firms have proven resistant to 2020’s severe market upheavals.

Instead, housebound consumers are adopting tech at lightning-fast speeds.

“We’ve seen two years’ worth of digital transformation in two months.”

—Satya Nadella, Microsoft CEO

Sector Strength

Following tech, what are the most resilient sectors so far in 2020?

Both e-commerce and discount firms boosted the consumer discretionary sector. E-commerce sales are projected to rise 18% in 2020 according to one study. At the same time, travel-related stocks across the sector felt much of the pain as restrictions cratered demand and individuals stayed at home.

Top SectorsYear to Date Price Returns*
Information Technology13.5%
Consumer Discretionary7.6%
Communication Services3%
Health Care0.5%

*as of market close June 10, 2020

Also weathering the storm was the communication services sector. Gaming heavyweights outperformed the index as a whole, as engagement and revenues witnessed positive momentum.

Surprisingly, the health care sector barely broke even. On one hand, there’s been surging optimism surrounding the eight S&P biotech firms developing COVID-19 vaccines. Investor enthusiasm led their combined market caps to balloon from $160 billion to over $600 billion within a narrow time frame.

Still, these gains were offset by a number of other health subsectors. The impact of COVID-19 created vulnerabilities across healthcare firms in dental, surgery, and physical therapy with high levels of debt. Additionally, 60% of firms in this sector have a ‘B’, or low credit rating, meaning they are more likely to default on payments.

Lagging Behind

As for the worst performing sectors, three have witnessed double-digit losses.

So far, it has been a harrowing year for the energy sector. Shifting mobility patterns coupled with a Russia-Saudi Arabia oil price war pushed oil prices into negative territory for the first time ever. Although this was a temporary event, current prices have still not recovered to anywhere near pre-COVID levels.

Worst SectorsYear to Date Price Returns*

*as of market close June 10, 2020

While energy dropped almost 30% year-to-date, financials also sank 18.5% as banking stocks failed to participate in the recent market reversal. An expected increase in loan losses is one possible factor behind investor skittishness, along with dampened lending activity.

Industrials, too, faced headwinds as supply chain disruptions threw a wrench in returns. Supplier plant shutdowns and transportation challenges weighed heavily on their operations. However, inventories and imports began to show signs of recovery in May.

Of course, there is still a long way to go. While there is renewed optimism as economies reopen, sustained consumer demand and economic growth figure prominently. At the same time, investors can stay open to sector opportunities as a future economic recovery steers ahead.

Advisor channel footer

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Continue Reading

Markets in a Minute

Data Centers: Investing in the Infrastructure of the Future

Infrastructure refers to any asset that provides an essential service. In today’s interconnected world, data centers are exactly that.



Data Centers

This infographic is available as a poster.

Data Centers: Investing in the Infrastructure of the Future

Digital transformation is one of the world’s most prominent trends today.

For evidence, consider the growth in internet users worldwide. By 2023, 5.3 billion people (66% of population) will be using the internet, up from 3.9 billion (51% of population) in 2018.

This growth has resulted in an incredible amount of data being produced each day, whether its from streaming music on Spotify or buying goods on Amazon. But how is all this data being processed?

In this Markets in a Minute chart from New York Life Investments, we shed light on the importance of data centers, and why they should be considered as core infrastructure.

The Role of the Data Center

A data center is a facility that stores, processes, and disseminates data. There are thousands of them around the world, and collectively, they’re referred to as the “cloud”.

This puts data centers at the center of nearly everything we do online: e-commerce, communications, storage and back-up, and even online gaming. To gain a better sense of what this all looks like, the following table breaks down the storage capacity of the world’s data centers.

Segment2016 Storage Capacity (exabytes)2021 Storage Capacity (exabytes) 
Database & analytics150380
Enterprise resource planning180420
Video streaming50180
Social networking60160
Search engine30100
Other consumer apps70190

Source: Statista (2021)

One exabyte is equal to one billion gigabytes, which means the world currently has 2.3 trillion gigabytes of total storage.

The largest segment is compute instances, which are cloud-based workstations used by data scientists. At the lower end of the scale are segments like video streaming (includes Netflix and Hulu) and social networking (think Facebook or LinkedIn).

Cloud Spending Reaches a Historic Milestone

For businesses that create and use data, moving to the cloud (as opposed to maintaining their own servers) has plenty of advantages like cost savings, flexibility, and security.

This is driving exponential growth in cloud infrastructure spending, which reached a record $130 billion in 2020. At the same time, spending on data center hardware decreased from $96 to $90 billion. These results are partly attributed to COVID-19, which forced many businesses to switch to a work-from-home operating model.

A survey conducted by 451 Research found that 40% of businesses had increased their usage of cloud services during the pandemic. In addition, 85% of those who were impacted indicated that the move would be a permanent one.

Data Centers are Infrastrcture

The scope of an infrastructure investor has historically been limited to companies in construction, energy, and transportation.

But what defines infrastructure?

It’s any physical system that is vital for an economy’s development and prosperity—and in a world where over 5 billion people are expected to be online by 2023, the data center is the perfect embodiment of that.

Advisor channel footer

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Continue Reading

Markets in a Minute

Sustainable Investing Assets Worldwide (2018-2020)

From 2018-2020, global sustainable investing assets grew by 15% to reach $35.3 trillion. Here’s how they break down across five major markets.



Sustainable Investing

This infographic is available as a poster.

Sustainable Investing Assets Worldwide (2018-2020)

Sustainable investing is top-of-mind for many investors, but how fast is it actually growing?

Between 2018 and 2020, global sustainable investing assets grew 15% to reach $35.3 trillion. This works out to more than a third of total assets under management.

In this Markets in a Minute from New York Life Investments, we explore the value and growth of sustainable investing assets across five major markets.

What is Sustainable Investing?

Sustainable investing considers environmental, social, and governance (ESG) factors in portfolio selection and management. For the purposes of this data, it is a broad definition that includes seven main approaches:

  • ESG integration
  • Corporate engagement & shareholder action
  • Norms-based screening
  • Negative/exclusionary screening
  • Best-in-class/positive screening
  • Sustainability themed/thematic investing
  • Impact and community investing

In most regions, it is becoming increasingly common to combine several of the above strategies within the same product.

Sustainable Investing Assets by Region

Sustainable investment data comes from five major markets: the U.S., Europe, Japan, Canada, and Australasia. Currencies have been converted to U.S. dollars at the prevailing exchange rate at the day of reporting. We’ve based growth rates on U.S. dollar values.

Here is the value of sustainable investing assets in U.S dollars, sorted by asset amounts in 2020.

Region20182020Growth Rate
United States$12.0T$17.1T42%

All 2020 assets are reported as of December 31, 2019 except for Japan which reports as of March 31, 2020. Australasia is Australia and New Zealand. In 2020, Europe includes: Austria, Belgium, Bulgaria, Denmark, France, Germany, Greece, Italy, Spain, Netherlands, Poland, Portugal, Slovenia, Sweden, the UK, Norway, Switzerland, and Liechtenstein.

The U.S. makes up almost half of global sustainable investment assets, and saw the second highest growth rate. One strong theme in the country is racial justice investing. Over 120 investors and organizations signed a call to action for the investment community to dismantle systemic racism and promote racial equity and justice. They plan to achieve this through various actions, such as hiring people of color and financing Black entrepreneurs.

Europe makes up over a third of all sustainable investing assets. The region has seen important regulatory developments, such as:

  • Institutional investors, asset managers, and advisors must report on how they integrate sustainability risks and adverse impacts at the entity level
  • Advisors are required to ask about their clients’ ESG preferences and advise appropriate products

While Europe saw a decline in growth from 2018-2020, this is because the region has changed how they define sustainable investing. Tighter legislation means that some products that previously qualified as sustainable may not meet the new requirements. The goal of the legislation is to create clear standards for sustainable products, promoting trust and easier access for investors.

The Mounting Pressure

Globally, the proportion of sustainable investing assets is growing. In fact, sustainable investments make up 36% of global assets under management, up from 28% in 2016.

Investment professionals say the top drivers of sustainable investing are to help manage investment risks, and because clients demand it. Not only that, the recent Intergovernmental Panel on Climate Change (IPCC) report has reinforced the importance of sustainable investments.

“The climate crisis poses enormous financial risk to investment managers, asset owners and businesses….. The public and private sector must work together to ensure a just and rapid transformation to a net-zero global economy.”
António Guterres, UN Secretary-General

Advisor channel footer

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Continue Reading
New York Life Investments


Are you a financial advisor?

Subscribe here to get every update, including when new charts or infographics go live:

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.