What are stock market sectors?
There are a range of different market sectors listed on stock exchanges around the world and these sectors aim to group companies together according to their main business activities. This gives an investor the ability to compare companies within a specific sector.
To make comparing companies within a sector easier, stock markets often have various different indexes that track a sector more broadly such as the S&P500, the ASX200 & the FTSE 100 etc. But there are also indexes that track more specific sections of each market sector such as tracking the top performing listed (publicly traded) Artificial Intelligence companies.
There is a Global Industry Classification Standard otherwise known as GICS which aims to standardise industry definitions on a global level. As such, the standard stock market sectors you can invest in are:
Consumer Discretionary: Companies from a broad range of industries such as media, general retailing and gambling.
Consumer Staples: Companies involved in the production and distribution of essential products like food, beverages and household items.
Energy: Explorers and/or producers of energy resources such as oil, gas and renewable energy.
Financials: Banks, asset managers, insurance companies and other providers of financial services.
Health Care: Pharmaceuticals, biotechnology, medical practice and pathology companies, as well as junior life sciences and medical device companies.
Industrials: Companies from a broad range of industries such as construction and engineering, infrastructure, transport and commercial services
Information Technology: A variety of mainly small to medium-sized businesses, such as IT consultancies, software developers and vendors.
Materials: Producers of agricultural commodities, fertilisers, paper and forestry products, chemicals and building materials.
Metals/Mining: Many of the world's leading resource companies, along with a growing number of mid-tier producers and exploration companies.
Telecommunications Services: Telecommunications carriers, distributors and resellers.
Utilities: Major electricity and gas retailers and a number of smaller utility providers.
Real Estate: Companies, investment trusts involved in deriving income solely from commercial, industrial and residential real estate (includes REITs).
Please know, the value of investments can go up as well as down and you may receive back less than your original investment, meaning, when investing your capital is at risk.
Disclaimer: At Evarvest we believe in making investing and investment education more accessible, but we don’t provide investment advice and individual investors should make their own decisions. While we try our best, we cannot ensure the accuracy of the information we provide.
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