What are market sectors?
A Sector is a collections of companies that work in the same field of business. Examples are energy, healthcare and real estate.
Each public company is assigned a sub-industry, industry, industry group and sector according to its principal business activity. There are 11 sectors, 24 industry groups, 69 industries and 158 sub-industries.
The market sectors are (with tickers):
- Energy (XLE)
- Materials (XLB)
- Industrials (XLI)
- Consumer Discretionary (XLY)
- Consumer Staples (XLP)
- Healthcare (XLV)
- Financials (XLF)
- Information Technology (XLK)
- Communication Services (XLC)
- Utilities (XLU)
- Real Estate (XLRE)
All of the sectors have ETFs (exchange-traded funds) that track them, some ETFs focus on a specific industry subgroup within a sector.
Why invest in market sectors?
Understanding market sectors may help you diversify your portfolio and gain exposure a broad range of companies in the same sector instead of investing in a single company, you may also want to invest in specific sectors such as energy or healthcare.
Disclaimer: This article does not represent investment advice and is solely the author’s opinion. The author is not a financial advisor. Readers are expected to perform their own due diligence before making investment decisions.
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