While the S&P/ASX 200 (INDEXASX: XJO) index has had a turbulent 12 months, punctuated by the 2H18 declines and subsequent rebounds, not all sectors are created equal.
Let's take a look at two of the worst performing S&P sectors from the last year and their prospects for rebounding in FY20.
S&P/ASX 200 Energy (ASX: XEJ)
The ASX 200 Energy sector has the unwelcome title of being the only sector out of the 11 majors that finished the financial year in the red.
The index finished the year down 8.33% by my estimates (from 2 July 2018 to 30 June 2019) as the Federal election, a lack of national energy policy and global pricing dragged on index performance for the year.
I personally like many of the stocks in the energy sector, including Beach Energy Ltd (ASX: BPT), however others such as Origin Energy Ltd (ASX: ORG) have struggled to maintain volumes amid fierce competition, with its share price shedding 25.8% of its value in the last 12 months.
Beach soared in the first three months of 2019 on higher global crude oil prices and strong earnings before cooling in 2Q19, while the threat of electricity pricing intervention continues to weigh on Origin's share price.
S&P/ASX 200 Utilities (ASX: XUJ)
Given the poor performance from the Energy sector, it's perhaps unsurprising that the closely-related Utilities sector comes in second for the financial year, returning just 0.15% for the year.
It was somewhat of a mixed bag for the utilities constituents, with the APA Group (ASX: APA) share price gaining 9.42% during the year, while AGL Energy Ltd (ASX: AGL) saw its share price fall 10.47% during the financial year.
The APA share price has gained 26.1% this year alone to rebound from a disappointing 2H18, while the AGL share price has struggled to post gains throughout the last 12 months amid its ongoing battle with the Federal government over the Liddell Power Plant and a change of CEO.
Will these sectors rebound in 2H19?
Overall, I think the re-election of the Coalition and ability for the Prime Minister to reset the government's energy policy debate should help the energy sector companies and the sector could rebound strongly in the second half of the year.
While the utilities and energy sectors have struggled in the last 12 months, I also think the countercyclical nature of their earnings could be worth trading off some growth potential for greater stability in the next 6 to 12 months.
