To closeout 2015, December posted a -1.6% return for the S&P 500 Total Return Index. The index was held down by energy again. The energy sector was down -10.0%, -0.6%, and -23.6% for December, 4Q, and 2015 respectively. The second worst performing sector was materials. This underperformance of energy and materials was a definite theme for the entire year. Could some of this reverse in 2016?
On the plus side for December was the staples, utilities, telecom sectors and health care. These defensive sectors were the only sectors posting a positive return in December, which shows a risk-averse investment atmosphere. For the year, the story was a bit different. Discretionary was the best performing sector followed by health care and tech.
Michael Grove, CFA