If you want to use a sector investing strategy for your exchange traded fund (ETF) and other investments, know that various sectors fall in different places along the risk/return continuum.
According to the people at State Street Global Advisors (SSgA), purveyors of Select Sector SPDR ETFs, with input from Ibbotson Associates, the following sector allocations are the most appropriate for the U.S. equity portion of your portfolio.
Conservative portfolio (15 percent U.S. stocks)
Consumer Discretionary Select Sector SPDR (XLY) 5 percent
Consumer Staples Select Sector SPDR (XLP) 16 percent
Energy Select Sector SPDR (XLE) 14 percent
Financial Select Sector SPDR (XLF) 15 percent
Health Care Select Sector SPDR (XLV) 10 percent
Industrial Select Sector SPDR (XLI) 15 percent
Materials Select Sector SPDR (XLB) 10 percent
Technology Select Sector SPDR (XLK) 14 percent
Utilities Select Sector SPDR (XLU) 15 percent
Aggressive portfolio (63 percent U.S. stocks)
Consumer Discretionary Select Sector SPDR (XLY) 15 percent
Consumer Staples Select Sector SPDR (XLP) 8 percent
Energy Select Sector SPDR (XLE) 6 percent
Financial Select Sector SPDR (XLF) 23 percent
Health Care Select Sector SPDR (XLV) 16 percent
Industrial Select Sector SPDR (XLI) 9 percent
Materials Select Sector SPDR (XLB) 5 percent
Technology Select Sector SPDR (XLK) 18 percent
Utilities Select Sector SPDR (XLU) 6 percent
