COMMENTARY:
As the ETFsector.com team reflects on 2024, a few of the themes that drove performance this year included:
Expanding profit growth: Earnings improved across various sectors, with growth expanding beyond the “Magnificent Seven”.
Interest rate cuts: The Federal Reserve began cutting interest rates, further boosting market performance.
Presidential election impact: The 2024 election results influenced market dynamics, with certain sectors benefiting from anticipated policy changes.
The Bulls Ran! The index set 57 new record highs throughout the year, placing 2024 among the top five years for most all-time records.
- The ETFsector.com Elev8 Sector rotation model performed well since its mid-year inception. The model did not hold Materials, HealthCare, or Utilities, and was overweight the other nine sectors. Sector rotation, in general, saw a mid-year shift saw increased performance in cyclical and defensive areas such as utilities, real estate, industrials, and financials.
- The best performing sector for the year was Communication Services. Meta (+65.4%), Google(both classes) (+35%), and Netflix (+83.0%), all members of the “Magnificent 7”, of course were in the headlines all year.
- Financials were up 28.5% YTD. Berkshire Hathaway (+27.0%), JP Morgan Chase (+40.9%), along with Visa (+21.4%) and MasterCard (+23.5%) were the top four names in the sector and cumulatively represented almost 37% of the exposure.
- Materials was the only sector in the red for the year. It fell 1.6%. Freeport-MaMoran (-10.6%) and Newmont Corp (-10.1%) were among the laggards in the index.
ETF Tidbits:
- Lastly, 2024 was a record year for the ETF marketplace, total flows into ETFs in 2024 was ~$1.14-Trillion, which broke the old record by 25%, or ~$225-Billion.
