Sector Breakdown

AAA

DEFINITION of 'Sector Breakdown'

The mix of sectors within a fund or portfolio, typically expressed as a percentage of the equities asset class. Sector designations vary slightly depending on the criteria used, but the most common equity sectors include:

-Industrials/Basic Materials
-Consumer Durables/Staples
-Consumer Cyclicals
-Technology
-Healthcare
-Financials
-Energy
-Utilities

INVESTOPEDIA EXPLAINS 'Sector Breakdown'

Sectors are a broader classification than industries, although some companies (especially more modern ones) can make a case for being "counted" in several different sectors. Companies within the same sector tend to have relatively high correlations in their rate of revenue and earnings growth, stock price performance, and earnings forecasts - especially over short- and medium-term time periods.  

A diversified stock portfolio should hold stocks across most, if not all, sectors. Market weightings of sectors can be found by looking at the composition of a broad index like the S&P 500.

RELATED TERMS
  1. Diversification

    A risk management technique that mixes a wide variety of investments ...
  2. Consumer Cyclicals

    A category of stocks that rely heavily on the business cycle ...
  3. Energy Sector

    A category of stocks that relate to producing or supplying energy. ...
  4. Sector

    1. An area of the economy in which businesses share the same ...
  5. Multi-Asset Class

    A combination of asset classes (such as cash, equity or bonds) ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
Related Articles
  1. Fundamental Analysis

    Sector Rotation: The Essentials

    We look at how the market signals impending economic cycles and sector performance during each stage.
  2. Retirement

    Where Top Down Meets Bottoms Up

    Find the investing "sweet spot" by combining these two styles.
  3. Mutual Funds & ETFs

    Do Focused Funds Provide a Better Outlook?

    Should you diversify or focus? Read on to decide which will work best for you.
  4. Professionals

    Why Investors Need to Rebalance Their Portfolios

    The best way to explain why one should rebalance their portfolio is to show what could go wrong if one doesn't.
  5. Fundamental Analysis

    What are the most common issues with Serial Correlation in stocks?

    Read about the concept of serial correlation in stock returns, and learn why market analysts are divided about the efficacy of trading based on stock patterns.
  6. Fundamental Analysis

    What are the components of shareholders' equity?

    Understanding company valuation figures, such as shareholders' equity, can be a powerful tool in assessing the financial strength of a business.
  7. Bonds & Fixed Income

    What is the difference between the yield of stock and the yield of a bond?

    Explore and understand the various meanings of the investment term "yield" as it is applied to equity investments and bond investments.
  8. Investing Basics

    What is the difference between a REIT and a real estate fund?

    A real estate fund invests in securities offered by public real estate properties directly or indirectly through Real Estate Investment Trusts (REITs).
  9. Bonds & Fixed Income

    How do I calculate yield to maturity of a zero coupon bond?

    Find out how to calculate the yield to maturity for a zero coupon bond, and see why this calculation is more simple than a bond with a coupon.
  10. Fundamental Analysis

    What does the term 'invisible hand' refer to in the economy?

    Discover and understand the concept of the "invisible hand" as explained by Adam Smith, considered the founder of modern economic theory.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center