Using my proprietary Risk Opportunity and Reward (ROAR) scores, here’s a map of the 11 S&P 500 Index ($SPX) sector-specific ETFs. Each represents a different economic area within the S&P 500 and is mandated to hold the stocks from that sector in their respective weights. Those weights are determined according to the market capitalization of each stock. 

ROAR Reviews S&P Sector ETFs 

I review all 11 sector ETFs daily, along with many other stocks and funds, using my ROAR system. As a reminder, ROAR’s goal is simple. Rather than use the traditional labels of buy, sell, and hold, ROAR estimates the probability of a single outcome. Specifically, will the next 10% move in the stock be up or down? 

ROAR is not an exact science, because nothing in modern investing is. However, I find it to be a useful guide for risk management. 

Anyone can buy a stock and try to make 10% or much more. Far fewer think about how to avoid losing 10% or more along the way. 2025 has richly rewarded those who prioritize risk management. Not by necessarily making them a lot more, but protecting them from a lot more downside. That has both financial and emotional benefits for investors.

I divided the 11 sector SPDRs into four groups, since their visual chart patterns and their associated ROAR scores worked out quite cleanly that way. I felt I was looking at the same chart for multiple sectors. Here’s what I concluded:

Most Promising Sectors 

Communications (XLC) and Consumer Discretionary (XLY) both have “spot” scores (most recent daily ROAR reading as of May 5) of at least 50. So I put them in this top tier based in part on that factor.

Stable (But Unexciting) Sectors

So far, May has been exactly that – stable but unexciting. We have seen lots of little gyrations at the macro level, but nothing resolved. Utilities (XLU) and Consumer Staples (XLP) make up this set. ROAR scores for both have been rising over the past several weeks, but both are still slightly below 50, so they remain in neutral territory. 

Wild and Volatile Sectors 

Several sector ETFs have spent the past few months generating big returns. However, these sector ETFs have also been subject to a good deal of volatility. 

When a stock or ETF gyrates wildly, it can throw off all types of technical analysis, including the ROAR system. Still, I’d characterize these sectors as unpredictable, not necessarily ones to avoid. Risk tolerance, as always, is the trader’s guide.

Nearly half (five) of the 11 S&P 500 sector ETFs are in this bucket. Those are REITs (XLRE), Financials (XLF), Technology (XLK), Basic Materials (XLB), and XLI (XLI). All are rebounding from deeply depressed ROAR scores set in March and early April.

Significantly, while that handful of ETFs now sport higher scores, they are all in the 30-40 range as of the May 5 close. That tells us that while a recovery has occurred, there’s still a long way to go. 

Stuck-in-the-Mud Sectors 

These last two sector ETFs are just like some horses in this year’s Kentucky Derby. Stuck in the mud. 

The final two sector ETFs to highlight, if we can call it that, are Energy (XLE) and Healthcare (XLV). Both have ROAR scores around the 20 level. 

If you have read my recent ROAR analysis here at Barchart, you may recall that scores under 20, which implies a 20% chance that a stock or ETF will rally 10% before it falls 10% from here, are a bit of a “black hole.”

In other words, under 20 on the ROAR scale does not need to be pinpointed. Once a stock or ETF is at that level, it needs to escape that basement before it can be seriously considered as a lower-risk potential holding.

The same applies to scores over 80, but in the opposite direction. They tend to be the best reward/risk tradeoffs until that score dips under 80. But an 85 versus a 95 is not much different. 

Slim Pickings in Sector Land (for Now) 

Note that no sector ETF currently has a ROAR score of more than 50% as of May 5. 

Translation: all 11 sectors are more likely to fall 10% before they rise 10%. When we consider that these 11 ETFs comprise the S&P 500 Index, that tells us that while the future is uncertain, the odds lean toward down before up.

That could also spell a range-bound market for a bit. Rather than consider the 10% band around the current stock or ETF price to be hard-coded, it is best to think of ROAR as a decision-making aid, to be considered alongside the broader investment process, whatever that is for each investor and trader. 

Given that lack of clarity across sectors, investors should be more careful than usual when considering how aggressive to be. Higher ROAR sectors have better odds, but there are no layups right now.