The S&P 500 Information Technology sector, which makes up about 28% of the S&P 500 index, returned -28.2% in 2022, more than 10 percentage points less than the broad index.
S&P 500 Information Technology sector's historically strong performance
The IT sector, returning 9.8% for the first two months of 2023, has rebounded this year. During that span, the S&P 500 index returned 3.7%. February brought a 0.4% gain for IT while the S&P 500 lost 2.4%.
Although the IT sector has been more volatile, higher returns have compensated investors with a better risk-reward profile. Over the past decade, IT stocks have produced a 19.2% annualized return with an 18.3% volatility. The S&P 500 returned 12.3% and volatility was 14.9%.