The MarketGauge Monthly Sector Seasonality Report: April 2024

| April 3, 2024

In this report we’ll look at the performance during the month of April for about 30 sector ETFs along with ETFs of the major equity indexes, long bonds, and key commodities. The time period of the data begins in 2010.

The report answers the following questions about performance in April:

  • What percentage of the time has the ETF had a positive return?
  • What’s the average percentage return?
  • What has been the best and worst performance during April for each ETF?

For the market (SPY and QQQ), April is one of the strongest months, looking back 10, 20, 50 years, and more.

As you can see from the chart of the SPY’s historical trend during April, it’s a month that trends higher from start to finish with more volatility at the beginning of the month than in the second half. This could be related to a high number of earnings reports at the beginning of the month.

With the above perspective as my starting point, I had very different expectations for what I’d find when I looked into the performance by sector for the month of April.

In other words, the best and worst performing sectors were not what I would have expected.

You may find additional observations of your own, here are several notable patterns.

  • SPY and DIA have the highest % of positive Aprils at 86% (12 of 14)
  • XLK (Technology) has been positive 71% of the time but SMH has the lowest rate of being positive in April at only 43% (6 of 14 years). You’ll also find that SMH ranks second to last in average % return with a return of only 0.6%.
  • USO likes April – up 71% of the time with an average return of 1.6% despite having the biggest “Worst April” of any ETF in this report (shown below).
  • XLU, commonly viewed as defensive, and XLB are both positive more than all the other sectors.

The charts below rank the sectors (and indexes) in order of their average return for April. Remarkably, only one has a negative return: PBW (Invesco Wilder Hill Clean Energy).

The chart that displays the best and worst months for each sector is ordered by average return for April so you can see additional patterns more easily as described in the list of notable patterns below:

  • 3 of the top 5 sectors in terms of average returns and largest monthly moves are in energy. The other two are related to metals.
  • The 3 energy sectors with the largest “Best April” returns have some of the smallest “Worst April” values. In contrast, SMH, which has a very low average % return, has a “Worst April” that is the same magnitude as its “Best April.”
  • It is interesting that the energy ETFs XLE, XOP, and OIH have relatively small “Worst April” values, with USO having the largest.
  • As noted in the top section, SMH is one of the worst performers in this report in April.

Below you’ll find the tables with the data that created the charts above:

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