The 11 Different Stock Market Sectors

Keep reading to learn what stock market sectors are, and why you want to include some of them into your investment portfolio. The different stock market sectors have several benefits, including helping individuals build well-diversified investment portfolios and understand the behavior of the market. Companies that make biofuels such as ethanol, fuels made from plants such as grain are Energy Sector Stocks.

Determining what constitutes a Basic Material can be tough because sectors overlap. However, they categorize some paint additives as cleaning products or pharmaceuticals. Surprisingly, healthcaredid not perform well over the last 2 and 5 years, but convert swedish krona to japanese yen over 10 years has managed to outperform the market. I have no business relationship with any company whose stock is mentioned in this article. Some of the largest industrial companies in the world include Boeing , Honeywell , and Union Pacific .

SPDR S&P 500 ETF Trust

As the name suggests, the newest addition to the S&P sectors includes Real Estate Investment Trusts , as well as realtors and other companies. Companies in the sector include American Tower Corp., Boston Properties, and Equinix. The S&P sectors constitute a method of sorting publicly traded companies into 11 sectors and 24 industry groups.

• Companies grouped in the materials sector have a primary business involving extracting or processing raw materials or producing materials for use in manufacturing.
• From there, you can analyze how likely a market sector is to help you properly diversify your portfolio and reach your investment goals.
• The stock market may seem overwhelming, but the classification system that separates the stock market into 11 sectors can help investors understand the different sectors of the economy.
• You can check our sector Power Rankings here – where you can download the whole list of U.S. and international equity market ETFs in a spreadsheet to do your custom analysis.
• The Utilities Sector consists of companies that provide essential services to homes and businesses.

Working with an adviser may come with potential downsides such as payment of fees . There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors. If you’re looking to invest in consumer staples, some firms to consider include Campbell Soup Co., Kroger and Boston Beer Company.

Industrials Sector

Stocks here often do well when the economy is growing, and they’re influenced by inflation and changes in the U.S. dollar. The materials sector almost matched the growth of the S&P 500 over the past three years and showed one of the strongest recoveries after the initial market drop in 2020. Here are the 11 stock market sectors, starting with the highest-growth stock sector from 2017 to 2022 and descending in order. The technology sector includes multiple sub-sectors and industries, from semi-conductor producers to software and hardware providers, as well as internet stocks and cloud computing. The real estate sector generally includes two different types of investments related to real estate. Some stocks in the sector are responsible for developing new real estate projects and then managing them by obtaining tenants for various spaces within the project property.

Consumers are generally providing recurring revenue for these companies, but some subsets of the industry face rapid change. Investing in individual telecom stocks may present higher volatility, but the telecom sector overall has exhibited reasonable long-term growth. The media and entertainment sector includes those stocks of the companies that provide information and entertainment to the common public. This has been placed under the cyclical sector because they are not urgently required for living and people only these products when they wish to. The information technology sector includes a wide range of companies involved in the manufacturing, distribution, market, and more of both hardware and software. Some of the most common components within this sector include IT services, software, communication equipment, hardware, electrical equipment, and more.

The consumer staples sector includes companies that produce food, drinks and tobacco, and non-durable household goods as well as those retailers that sell food and drugs, including retailing supercenters. The energy sector includes companies engaged in exploration and production of oil and other hydrocarbons, refining, the transportation of oil and gas, and production of oil and gas equipment. Companies within this sector market their products and services to consumers, who in turn buy these goods with discretionary income. Some of the businesses in this sector are in retail, travel, automobiles, restaurants, and luxury goods, to name a few.

The healthcare sector consists of medical device manufacturers, hospital management firms, biotech companies, and many others. This is a growth opportunity and defensive play sector, as people will always require medical aid. The consumer staples sector focuses on food and beverage companies, in addition to companies creating products consumers have no desire to cut from their budgets. These companies can general withstand an economic downturn, as they are defensive plays.

One alternative to the GICS schema is the Industry Classification Benchmark, or ICB. The ICB was developed in 2005 by Dow Jones and FTSE, and divides the market into 11 industries, 20 supersectors and then further into sectors and subsectors. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Any projections, estimates, forecasts, of america corporation targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. In contrast to consumer staples, these goods and services are generally those that consumers want but don’t necessarily have to have. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.

Links provided by Fidelity Brokerage Services

The simplest way to invest in an index is to buy a technology Exchange-Traded Fund such as the NYSE Technology ETF . The New York Stock Exchange Technology Index includes 35 of the top US technology companies. The SCHH invests in office building companies such as the American Tower Corporation , ProLogis , and the Digital Realty Trust . The Simon Property Group specializes in mall ownership, and ProLogis owns warehouses and fulfillment centers. Digital Reality owns data centers that support the internet, social media, and cloud computing. Some REITs invest in mortgage-backed securities and mortgages, which can generate high risks.

This site is provided to you for informational purposes only and should not be construed as an offer to buy or sell a particular security or a solicitation of offers to buy or sell a particular security. The authors & contributors are not registered financial advisors and do not give any personalized version 1 java developer aws portfolio or stock advice. My favorite software for stock market news is Benzinga Pro, with its super-fast real-time news engine, squawk box, and news impact ratings. Plus, Disney operates video-streaming services, resorts, theme parks, a consumer products business, and movie studios.

Investing in Tech Stocks This vast sector is comprised of some of the most valuable companies in the world. Investing in Top Consumer Discretionary Stocks When people have a little extra cash, they indulge in offerings from these companies.

The Technology beat the S&P 500 by 381%, Consumer Cyclical by +181%, and Healthcare by 34%. To perform this detailed analysis, we used our partner’s software Stock Rover, which is, in our opinion, the best screening, analysis, and research tool available. The Arizona-based electric and hydrogen-fueled semitruck maker has recalled all 93 vehicles it has manufactured to date after an employee discovered a problem with the seat belts in the company’s trucks. The dollar’s sustained rise is increasing the risk of global stagflation and recession, according to Mohamed El-Erian, the president of Queens’ College at Cambridge University. The mortgage REIT completed a reverse split on Friday, so it’s the first trading day post-split.

Materials

The consumer staples sector includes goods and services that consumers need, regardless of their current financial condition. The category includes companies in the food, beverage, and tobacco industries, as well as household and personal care products. You’ll also find retail companies that specialize in selling staples, such as supermarkets, in this group. The energy sector is made up of companies that work in energy sources, equipment, and services. Companies in this sector engage in a wide range of products and services, including drilling, energy exploration and production, storage and transportation, marketing, refining, and more. Instead, it’s primarily dominated by oil and gas, along with coal and other consumable fuels.

• The industrials sector consists of construction, machinery, fabrication, manufacturing, defense, and aerospace companies.
• Basic Materials are no longer the powerful market sector they were in the 20th Century.
• While an investment advisor can provide a more in-depth look at the characteristics of various market sectors, this guide provides a primer on the stock market’s sectors.

However, a few companies have managed solid performance against the market, especially American Water Works Co +475% and CMS Energy +115% over ten years. The technology sector is simply the best performing sector in the US stock market. The top 3 high-performing ETFs are the ARK Next Generation Internet ETF, iShares PHLX, Semiconductor ETF, and the VanEck Vectors Semiconductor ETF. Over the last ten years, the top 3 performing companies in the technology sector are Broadcom +1799%, Adobe +1477%, and Cadence Design Systems +1123%.

Companies in the real estate sector are involved in developing and managing real estate. Here you’ll find many real estate investment trusts and companies engaged in real estate leasing, management, and development. Growth in this sector lagged in the three years leading up to mid-2022, compared to the S&P 500 index.

What is Active Investing?

In general, the sector is considered to be both a growth opportunity and defensive play since people will always require medical aid. The energy sector consists of oil and gas exploration and production companies, as well as integrated power firms, refineries and other operations. In general, these companies generate revenue that’s tied to the price of crude oil, natural gas and other commodities.

Industrials include a wide range of companies, from airlines and railroad companies to military weapons manufacturers. Since the range of companies is so large, the sector has 14 different industries. Two of the largest industries are Aerospace & Defense and Construction & Engineering.