The US stock market is divided into 11 sectors according to the Global Industry Classification Standard (GICS). Each sector represents a different segment of the economy and tends to perform differently depending on economic conditions.
Companies involved in software, hardware, IT services, and semiconductors.
Top Companies:
Pharmaceutical companies, biotechnology firms, medical devices, and healthcare providers.
Top Companies:
Banks, insurance companies, investment firms, and other financial services.
Top Companies:
Non-essential goods and services that consumers purchase when they have sufficient income.
Top Companies:
Telecommunications, media, entertainment, and interactive media companies.
Top Companies:
Aerospace, defense, machinery, construction, and commercial services companies.
Top Companies:
Essential products like food, beverages, tobacco, and household items.
Top Companies:
Companies involved in the exploration, production, and supply of energy.
Top Companies:
Companies that provide electricity, gas, water, and other utility services.
Top Companies:
REITs, property management firms, and real estate development companies.
Top Companies:
Companies that discover, develop, and process raw materials.
Top Companies:
Sector rotation is an investment strategy involving shifting money from one industry sector to another in an attempt to beat the market by capturing upside potential of sectors positioned to outperform.
Defensive sectors like Utilities and Consumer Staples tend to outperform during economic downturns, while cyclical sectors like Technology and Consumer Discretionary typically lead during expansions.
The Global Industry Classification Standard (GICS) was developed by MSCI and S&P Dow Jones Indices in 1999 to provide an efficient investment tool to capture the breadth, depth and evolution of industry sectors.
Sector ETFs allow investors to gain targeted exposure to specific sectors without picking individual stocks. Popular sector ETF families include State Street's SPDR series (XLK, XLF, etc.) and Vanguard's sector ETFs.