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4 Sector ETFs That Crushed S&P 500 in Longest Bull Market

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The equity bull market turned 3,453 days on Aug 22, marking the longest stretch in American history. It means that the S&P 500 has not seen a 20% or more decline during this period. The markets began scaling upward on Mar 9, 2009, the day the slide in U.S. stocks was checked after the worst market rout since the Great Depression.

The collapse of Lehman Brothers in September 2008 wreaked havoc on Wall Street. And on March 9, 2009, the broader S&P 500 was below 700 for the first time in 13 years. But all this is history today as the S&P 500 is now trading at $2,856.98 (as of Aug 23, 2018). The Fed’s quantitative easing and rock-bottom interest rate policy in order to boost a struggling took Wall Street to this height.

While several sectors performed overwhelmingly, some shone like jewels. If we look at the ETF world, we’ll see that the S&P 500-based fund SPDR S&P 500 ETF (SPY - Free Report) returned about 322% in this nine-and-a-half-year-old bull market while the Technology and Consumer Discretionary sector proved far more gainful.

What Was Behind the Rise?

The unemployment rate at the start of the bull market was 8.3% while it was 3.9% in July 2018. Wage growth in the United States has also picked up in recent times which resulted in greater affordability.

As per Reuters, the final GDP reading in March 2009 came up with a year-on-year contraction of 5.7%. In contrast, GDP grew 4.1% year over year in Q2 of 2018 (read: 5 ETFs to Buy as Q2 GDP Growth Hits 4-Year High of 4.1%).

And there was Trump trade – the reason behind the monstrous rally in the U.S. market since late 2016. Solid fiscal reflation, deregulation, further job creation and the passing of the tax reform took Wall Street on cloud nine (read: Tax Bill: What ETF Investors Need to Know).

Sector ETF Winners


The emergence of cutting-edge technology such as cloud computing, big data, Internet of Things, virtual reality devices, and artificial intelligence as well as strong corporate earnings are acting as a key catalyst for the sector. Additionally, the dual tailwinds of a rising rate environment and Trump’s tax reform are driving the tech stocks.

First Trust Dow Jones Internet ETF (FDN - Free Report) – Up 1004.2%

First Trust NASDAQ-100-Tech Sector ETF (QTEC - Free Report) – Up 708.3%

iShares PHLX Semiconductor ETF (SOXX - Free Report) – Up 683.5%

Consumer Discretionary

After years of stagnation, the U.S. job market is finally strengthening, giving many lower income consumers some extra cash. The still-moderate fuel price is another positive for the fund.

Vanguard Consumer Discretionary ETF (VCR - Free Report) – Up 725.5%

Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) – Up 717.4%


Tax reform, successful clinical trials for new drugs & FDA approvals, stronger merger and acquisition activity have held the key to the success of this sector in recent times. 

First Trust NYSE Arca Biotech ETF (FBT - Free Report) – Up 819.2%

SPDR S&P Biotech ETF (XBI - Free Report) – Up 577.8%


The sector is viewed as a defensive one which has helped it to shine this year amid market doldrums emanating from trade war tensions between the United States and China. Also, the aging population, growing demand in emerging markets and product launches are the positives of the sector. Plus, President Trump’s announcement of the drug plans in May was in the best interest of pharma companies (read: Health Care ETFs Outperforming: Will the Rally Last?).

First Trust Health Care AlphaDEX ETF (FXH - Free Report) – Up 566.1%

Invesco Dynamic Pharmaceuticals ETF (PJP - Free Report) – Up 544.0%

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