What Are Stock Market Sectors?
A stock sector is a collection of publicly traded companies that work within the same general field of business: healthcare, energy, real estate, etc. stocks in each sector, in turn, have similar characteristics.
how many sectors are there in the stock market?
There are 11 stock sectors, according to the global industry classification standard, or gics, which is an industry taxonomy developed in 1999 by msci and standard & poor Within the entire gics structure, there are 11 sectors, 24 industry groups, 69 industries, and 158 sub-industries into which all major public enterprises are classified.
the 11 stock sectors are:
- healthcare sector
- materials sector
- real estate sector
- consumer staples sector
- consumer discretionary sector
- utilities sector
- energy sector
- industrial sector
- consumer services sector
- financial sector
- technology sector
11 stock sectors: list & explanation
1. health sector
The healthcare sector consists of shares of companies involved in a variety of healthcare-related industries, including but not limited to:
- pharmaceutical manufacturers
- medical devices
- healthcare providers
- biotech stocks
- insurance companies
examples of large healthcare companies include unitedhealth group (unh) and pfizer (pfe).
2. materials sector
The materials sector includes companies involved in the manufacture of:
- construction materials, chemical, paper and glass companies
- companies specializing in the manufacture of paper and forest products
- metal and mining companies
some of the world’s largest materials companies include dupont (dd) and sherwin-williams company (shw).
3. real estate
The real estate sector includes companies that develop or manage real estate. This sector also includes real estate investment trusts (REITs), which are companies that buy multiple income-generating assets, such as office buildings and hotels.
Some of the larger real estate companies include American Tower Corp. (amt) and simon property group (spg).
4. consumer staples sector
The consumer staples sector includes companies involved in food, beverages and tobacco, as well as producers of household goods and personal products. Because they are goods and services that consumers need, regardless of their current financial situation, consumer staples are considered a defensive sector (ie, recession-proof industries).
The largest consumer staples companies include Walmart (WMT), Procter & bet (pg), and the coca-cola company (ko).
5. discretionary consumption sector
The consumer discretionary sector, also known as consumer discretionary, includes companies involved in:
- luxury goods
- travel and leisure industries
Unlike consumer staples, these goods and services are generally those that consumers want but don’t necessarily have to have.
The largest consumer discretionary stocks include amazon (amzn), tesla (tsla), and home depot (hd).
6. service sector
The utility sector includes companies that provide customers with utility services, such as water, electricity, and gas. Since public services are considered essential to daily life, the public services sector is also generally considered a defensive sector.
some of the largest utilities include nextera energy (nee), duke (duk), and the south company (so).
7. energy sector
The energy sector comprises companies involved in the exploration, production, refining and sale of energy resources, including oil and natural gas, as well as companies that provide services to these industries.
The energy sector includes some of the world’s largest energy companies, such as Exxon Mobili (XOM) and Chevron (CVX).
8. industrial sector
The industry sector can include companies that are involved in a wide range of industries, including:
- construction and engineering of industrial machinery
- aeronautics and defense
- electrical equipment
some of the world’s largest industrial companies include boeing (ba), honeywell (hon), and union pacific (unp).
9. communication services sector
The communication services sector includes telecommunications service providers, such as:
- wireless telecommunications networks
- media and entertainment companies: older radio and television companies
- newer internet and interactive media companies
examples of large communication services companies include alphabet (goog) and facebook (fb).
10. financial sector
The financial sector includes a wide range of financial companies, including:
- investment banks
- commercial banks
- insurance companies
- financial service providers
- management companies assets
- financial corridors
The financial sector includes some of the largest financial companies in the world such as visa (v), jpmorgan chase (jpm), and bank of america (bac).
11. technology sector
The technology sector includes multiple sub-sectors and industries, from semiconductor producers to software and hardware providers, as well as internet and cloud computing stocks.
The sector includes companies with some of the largest market capitalizations in the world, such as Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN).
how to invest in sectors of the stock market
Investors can gain exposure to market sectors in a number of ways, including:
- purchase of individual shares within a given sector
- purchase of specialized funds in the sector: exchange-traded funds (otc: etfs) or mutual funds that primarily hold stocks within a single sector.
- investing in broad market index funds (such as s&p 500 index funds): this is a simple and effective way to gain diversified exposure to the 11 sectors of the stock market.
There are 11 stock market sectors, as classified by GICS, which stands for Global Industry Classification Standard. These sectors include healthcare, materials, real estate, consumer staples, consumer discretionary, utilities, energy, industrials, consumer services, finance, and technology.