ETF Earnings Risk Tool — Understand Hidden Sector Earnings Risk

Not all sector earnings are created equal. Some industries deliver relatively stable, predictable earnings over time, while others experience wide swings that can materially impact long-term risk. The ETF Earnings Risk Tool reveals how much earnings volatility you are actually exposed to — based on what your ETF owns.

Certain sectors, such as Consumer Staples and Utilities, tend to have more predictable earnings streams, which can justify higher valuations during periods of economic uncertainty. Others — including Energy, Financials, and Technology — have historically exhibited much higher earnings volatility. If you are overweight these sectors, you may be taking on more risk than you realize.

This tool overlays an ETF’s actual sector allocations with long-term and short-term earnings variability data going back to the Global Financial Crisis. Instead of relying solely on price charts or backward-looking returns, it allows investors to assess earnings-based risk — a foundational driver of long-term performance.

Why Earnings Risk Matters

• Reveals which sectors contribute the most to earnings volatility
• Helps identify ETFs with concentrated exposure to unpredictable industries
• Provides a more fundamental view of portfolio risk than price charts alone
• Supports better alignment with personal risk tolerance and time horizon

Many investors are surprised to learn that their portfolio’s earnings risk profile looks very different from what price performance alone would suggest. This tool makes that risk visible — clearly and efficiently.

Developed by Geoffrey Learmonth, ETF analyst and creator of ETF Rankings.