Market cap analysis
Larger-cap stocks, above $10 billion, make up 87.3% of the Financial Select Sector SPDR Fund (XLF). These stocks have lost 8% in the past year. They fell 6.8% last week. In comparison, the broad-market based S&P500 ETF (SPY) lost 5.9% during the week.
Smaller-capped stocks—those under $10 billion in market capitalization—have underperformed large-caps. They lost 11.2% in the past year and 8.3% last week. Small-caps’ underperformance relative to larger companies during hints at vulnerability in the broader market. The sense is that investors choose to stay with large caps since they’re safer bets amid uncertain global conditions.
Subgroup market cap analysis
Large-cap banking stocks make up 47% of the XLF portfolio. These stocks fell 8.2% in the last year. Small-cap banking stocks lost 5.5%. In comparison, large-cap diversified financial services stocks fell 15.1% in the trailing one year while small-cap diversified financial services stocks fell 17.7%.
Last week, both large-cap and small-cap banks lost ~9%. Large-cap and small-cap diversified financial services stocks lost 8% and 10%, respectively, in value. Genworth Financial (GNW), Navient (NAVI), and Capital One Financial (COF) fell 18.9%, 17.6%, and 12.8% last week.