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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →In the MSCI U.S. sector-index data available for 2026, consumer staples had lower reported volatility and a much shallower historical maximum drawdown than information technology. Information technology, however, had higher Sharpe ratios over the measured three-, five- and ten-year windows. That is a historical trade-off—not proof that staples are safe, that technology will keep outperforming, or that either sector suits every investor.
Define the sectors before comparing them
“Consumer staples” and “technology stocks” are classifications, not uniform types of companies or guarantees about share-price behavior. This comparison uses the MSCI USA Consumer Staples Index and MSCI USA Information Technology Index. Both cover U.S. large- and mid-cap companies classified under the Global Industry Classification Standard (GICS), making them reasonably aligned for a sector comparison. GICS is maintained by MSCI and S&P Dow Jones Indices; companies people casually call tech may belong to other GICS sectors.
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The index profiles are not from the same date: the consumer staples figures are as of August 31, 2026, and the information technology figures are as of September 30, 2026. The comparison below therefore uses matching lookback lengths but not perfectly simultaneous snapshots. See the S&P Dow Jones Indices overview of GICS for the classification framework.
What the MSCI risk figures show
MSCI reports these risk statistics using monthly net total returns. Standard deviation and Sharpe ratio are annualized for each lookback; maximum drawdown is the worst peak-to-trough fall over the index’s available history, with the period shown by MSCI.
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| Measure | MSCI USA Consumer Staples | MSCI USA Information Technology |
|---|---|---|
| Profile date | August 31, 2026 | September 30, 2026 |
| Annualized standard deviation, 3 years | 12.15% | 21.33% |
| Annualized standard deviation, 5 years | 13.64% | 23.34% |
| Annualized standard deviation, 10 years | 13.14% | 20.81% |
| Sharpe ratio, 3 years | 0.38 | 1.36 |
| Sharpe ratio, 5 years | 0.26 | 0.81 |
| Sharpe ratio, 10 years | 0.42 | 1.06 |
| Maximum drawdown and dates | 33.54%, December 31, 1998–March 31, 2000 | 81.10%, March 31, 2000–October 9, 2002 |
On these reported measures, information technology had higher volatility at every matching lookback and a substantially deeper worst historical drawdown. It also had higher Sharpe ratios in all three windows, indicating stronger historical return relative to measured risk for those periods. A higher Sharpe ratio does not erase the larger swings or drawdown: absolute risk and risk-adjusted performance answer different questions.
MSCI’s Sharpe-ratio calculation uses EMMI EURIBOR 1M as the risk-free-rate input from September 1, 2021, and ICE LIBOR 1M before that date. The ratios depend on that methodology as well as the return windows. The MSCI consumer staples profile and MSCI information technology profile provide the underlying index details.
Compare more than volatility
Standard deviation describes variation in returns; it does not tell you how much an investor could lose from a peak, how concentrated the index is, or how much income it distributes. The same MSCI profiles report these additional characteristics:
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| Profile measure | Consumer Staples, August 31, 2026 | Information Technology, September 30, 2026 |
|---|---|---|
| Dividend yield | 2.41% | 0.51% |
| P/E | 23.67 | 38.36 |
| Forward P/E | 21.76 | 21.31 |
| Number of constituents | 30 | 84 |
| Largest-holdings concentration | not stated by MSCI in the cited profile figures | not stated by MSCI in the cited profile figures |
These valuation ratios are snapshots, not forecasts of returns. The P/E figures differ, while the forward P/E figures are closer; neither pair establishes which sector is cheap or likely to perform better. Constituent count alone also does not establish diversification: the weight of the largest holdings matters, and the cited figures do not state it.
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How to compare returns fairly
Start with the same geography, market-cap range, currency, return type, dates and lookback period. Make sure both figures are total returns or both are price returns; dividends are included in total return. Then compare multiple horizons rather than selecting the period that makes one sector look best. Fees and taxes matter when comparing investable funds, but index results do not include the expenses of a particular fund.
The MSCI risk figures above are based on monthly net total returns and supply matched three-, five- and ten-year risk windows, but their as-of dates are a month apart. Do not mix them with a different benchmark or a one-year headline return and present the result as a like-for-like sector comparison.
For example, a June 2026 Nasdaq-100 Technology Sector Index supplement filed with the SEC reports annualized returns of 69.88% for one year, 32.46% for three years, 17.48% for five years, and 17.64% since January 4, 2021, through June 1, 2026. The same supplement gives S&P 500 returns of 28.56%, 21.66%, 12.58%, and 14.24% for those periods. These figures use different benchmark constructions and do not provide a direct consumer-staples comparison; they cannot establish that technology as a whole will outperform staples. The supplement also cautions against treating past returns as an indication of future performance. Read the SEC-filed June 2026 supplement.
What “defensive” means—and what it does not
Consumer staples businesses sell goods people commonly continue buying through varied economic conditions. That reputation can help explain why the sector is often described as defensive, but it does not make its shares stable or protect investors from losses. The MSCI staples index itself recorded a maximum drawdown of 33.54% over the period listed. An index statistic also cannot tell you how every company or every investor’s portfolio behaved.
Technology’s historical growth potential has come with greater volatility and a deeper recorded drawdown in these index data. Its higher Sharpe ratios show that returns were stronger relative to measured risk in the specified windows, not that the sector is lower-risk overall or will repeat that performance. Index composition, valuations and market conditions can change.
Use sector exposure in portfolio context
A sector fund or a collection of stocks from one sector remains a concentrated investment. The SEC warns that a mutual fund focused on one industry sector does not necessarily provide instant diversification. A portfolio decision should account for the investor’s other holdings, time horizon, ability to tolerate losses and broader mix of asset categories—not just a choice between staples and technology.
For background, the SEC’s Beginners’ Guide to Asset Allocation, Diversification, and Rebalancing and its overview of asset allocation and diversification explain how sectors fit into a wider allocation. The SEC also notes that stocks can lose value; neither sector index is a substitute for considering that risk.
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