In the 1800s, when stock market indices were first introduced, they covered railroads and industrials. That was it — a 2 sector market.
By 1900, other sectors were recognized, including utilities and energy companies.
Since then, things have changed. Transports have fallen from 38% to 2%; Utilities have been cut in half from 6% to 3%.
Many of the big shifts represent development of new technologies that either were imn their infancy or didn’t exist at all in 1900: Communications rose from 5% nearly tripling to 14%;
Information Tech was obviously nonexistent in 1900; today it represents about 12% of the U.S. Stock Market by market cap. Health Care was also a non-existent sector, but today counts for 9% of the market.
Over the past century, the market has become more varied and diversified than ever before.
I suspect that is a natural development which has contributed to the success of indexing and passive investing. If a single low cost purchase gives broad exposure to all of these sectors and their components, it removes some of the motivation for a more active management approach.
200 Years of U.S. Stock Market Sectors
Source: Visual Capitalist