A year ago the country was celebrating a historic victory for the US armed forces, and on a lesser scale celebrating a new 3-yr high published by the S&P 500 Index. In the case of the latter, it was a victory that would prove short-lived from one perspective, as the S&P's high watermark in early-May 2011 would survive as the market's 52-week high for the next 9 months, during which the market corrected more than 20% from those highs.  A year later, however, the S&P 500 has recently exceeded those May 2011 highs, and seemingly survived its recent challenge of Q1 earnings reports. Based on data compiled by Bloomberg, 74% of the 300 S&P 500 companies that have reported Q1 earnings have "beat" their respective estimates.

A year removed from those May 2011 highs, we thought it interesting to illustrate the difference in the manner which the market has exceeded those highs, versus how it obtained them in the first place. For instance, in the two years leading up to May 2011 (5/1/2009 - 5/1/2011), the Equal-Weighted S&P 500 Index [SPXEWI] handily outperformed the cap-weighted S&P, beating that benchmark by more than 20% with gains 76.6%. With few exceptions, Cap-weighted Sector Funds failed to outperform Equal-weighted Sectors, as small and mid cap securities provided a stark positive divergence over that period of market growth. More recently, however, at least within the S&P 500 universe, market returns have been derived a bit differently. The table below shows the return profile of a family of cap-weighted Sector Funds (iShares) and Equal-weighted Sector Funds (Guggenheim). In 9 out of 10 cases, over the past 12-months, the cap-weighted investment option has produced better results (mouse-over for year-to-date comparison). While most of the "comps" are pretty close, our attention is once again drawn toward the US Technology sector, which has truly produced bifurcated outcomes over the past year.