Dictionary
Financial Glossary
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> "Sector" Definition |
 Sector
Refers to a group of securities that are similar with respect to maturity, type, rating, industry, and/or coupon.
A particular group of securities that are in the same industry.
A group of listed companies operating in the same industry. In order to help investors compare the performance of similar companies, the share prices and financial ratios of these companies are reported together in newspapers.Example sectors:Entertainment and HotelsGeneral RetailersElectrical and Electronic equipmentBeveragesIn deciding whether a share price is good value or bad value, it helps to look at companies in the same sector. If Company A is on a P/E of 15 and Company B is on a P/E of 26, and they are both in toy retailing, you would certainly want to find out why before buying either. You would also want to compare the P/Es to the average P/E of the whole sector.If you plan to run a diversified portfolio in order to minimise risk, one way to do this is to make sure that you have no more than 2 shares in each sector. So a portfolio of 20 shares might span 10 sectors. The logic is that different sectors react to economic conditions in different ways, so a portfolio with shares across a number of different sectors maybe at less risk than one heavily concentrated in one sector.In February 2000 FTSE International launched a set of global sector indices, reflecting the shift by fund managers away from country-driven portfolio management towards sector-driven portfolio management. The indices cover:autosbanksbasic industriesenergyfinancialsgeneral industriesmediapharmaceuticaltechnologytelecommunicationsutilitiesFor each sector the indices include the most widely traded blue chip stocks, and their purpose is to give investors benchmarks against which to measure performance, and for which to create retail products such as exchange-traded funds.
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Glossary 
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Sector \ Refers to a group of securities that are similar with respect to maturity, type, rating, industry, and/or coupon.
A particular group of securities that are in the same industry.
A group of listed companies operating in the same industry. In order to help investors compare the performance of similar companies, the share prices and financial ratios of these companies are reported together in newspapers.Example sectors:Entertainment and HotelsGeneral RetailersElectrical and Electronic equipmentBeveragesIn deciding whether a share price is good value or bad value, it helps to look at companies in the same sector. If Company A is on a P/E of 15 and Company B is on a P/E of 26, and they are both in toy retailing, you would certainly want to find out why before buying either. You would also want to compare the P/Es to the average P/E of the whole sector.If you plan to run a diversified portfolio in order to minimise risk, one way to do this is to make sure that you have no more than 2 shares in each sector. So a portfolio of 20 shares might span 10 sectors. The logic is that different sectors react to economic conditions in different ways, so a portfolio with shares across a number of different sectors maybe at less risk than one heavily concentrated in one sector.In February 2000 FTSE International launched a set of global sector indices, reflecting the shift by fund managers away from country-driven portfolio management towards sector-driven portfolio management. The indices cover:autosbanksbasic industriesenergyfinancialsgeneral industriesmediapharmaceuticaltechnologytelecommunicationsutilitiesFor each sector the indices include the most widely traded blue chip stocks, and their purpose is to give investors benchmarks against which to measure performance, and for which to create retail products such as exchange-traded funds.
Sector / refers to a group of securities that are similar with respect to maturity, type, rating, industry, and/or coupon.
a particular group of securities that are in the same industry.
a group of listed companies operating in the same industry. in order to help investors compare the performance of similar companies, the share prices and financial ratios of these companies are reported together in newspapers.example sectors:entertainment and hotelsgeneral retailerselectrical and electronic equipmentbeveragesin deciding whether a share price is good value or bad value, it helps to look at companies in the same sector. if company a is on a p/e of 15 and company b is on a p/e of 26, and they are both in toy retailing, you would certainly want to find out why before buying either. you would also want to compare the p/es to the average p/e of the whole sector.if you plan to run a diversified portfolio in order to minimise risk, one way to do this is to make sure that you have no more than 2 shares in each sector. so a portfolio of 20 shares might span 10 sectors. the logic is that different sectors react to economic conditions in different ways, so a portfolio with shares across a number of different sectors maybe at less risk than one heavily concentrated in one sector.in february 2000 ftse international launched a set of global sector indices, reflecting the shift by fund managers away from country-driven portfolio management towards sector-driven portfolio management. the indices cover:autosbanksbasic industriesenergyfinancialsgeneral industriesmediapharmaceuticaltechnologytelecommunicationsutilitiesfor each sector the indices include the most widely traded blue chip stocks, and their purpose is to give investors benchmarks against which to measure performance, and for which to create retail products such as exchange-traded funds.
