The stock market is sometimes classified into 11 major sectors, each of which represents a different aspect of the economy. Within each industry, there are a variety of publicly traded corporations with similar general objectives. Investors who want to obtain exposure to a specific sector of the economy or apply a sector-rotation strategy to position their portfolio may look at exchange-traded funds (ETFs) in that sector.
We’ll look at the stock market sectors and the numerous ETFs that may be used to obtain exposure to them in this post.
Financials
Banks, investment funds, insurance businesses, and real estate corporations are all part of the financial industry. The majority of the industry’s earnings comes from mortgages and loans that appreciate in value when interest rates climb.
The following are the most popular financial ETFs:
- Financial Select Sector SPDR Fund is a mutual fund that invests in the financial sector (XLF A)
- Vanguard Financials ETF (VFH A+) is a Vanguard ETF that invests in financial companies.
- The SPDR S&P Bank ETF is a mutual fund that invests in banks (KBE A)
Utilities
Electric, gas, and water firms, as well as integrated suppliers, make up the utilities sector. In general, the industry produces recurring income by levying fees on customers and firms that pay higher-than-average dividend returns.
The following are some of the most popular utilities exchange-traded funds (ETFs):
- SPDR Utilities Select Sector (XLU A)
- Vanguard Utilities ETF (VPU A+) is a Vanguard ETF that invests in utilities.
- Global Infrastructure ETF (iShares) (IGF A-)
Discretionary on the part of the consumer
Retailers, media firms, consumer service providers, fashion companies, and consumer durables make up the consumer discretionary sector. In general, these businesses gain from rising consumer spending when the economy improves.
The following are the different sectors in stock market for consumer discretionary ETFs:
- Consumer Discretionary Select Sector SPDR is a fund that invests in consumer discretionary products (XLY A)
- Vanguard Consumer Discretion ETF (VCR A) Consumer Discretionary AlphaDEX Fund (FDX) Consumer Discretionary AlphaDEX Fund (FDX) Consumer Discretionary AlphaDEX Fund (FDX) Consumer Discretion
Consumer Goods
Food and beverage firms, as well as companies that offer products that customers are unwilling to sacrifice from their budgets, make up the consumer staples industry. In general, these businesses are defensive bets that can weather a downturn in the economy.
The following are the most popular consumer staples ETFs:
- Consumer Staples Select Sector SPDR is a mutual fund that invests in consumer goods (XLP A)
- Consumer Staples AlphaDEX Fund (FXG B+) is a fund that invests in consumer goods.
- Vanguard Consumer Staples ETF (VDC A+) is a Vanguard ETF that invests in consumer goods.
Energy
Oil and gas exploration and production companies, as well as integrated power companies, refineries, and other operations, make up the energy sector. These businesses produce revenue based on the price of crude oil, natural gas, and other commodities in general.
The following are the most popular energy ETFs:
- SPDR Energy Select Sector (XLE A)
- Vanguard Energy ETF (AMLP A) Alerian MLP ETF (AMLP A) (VDE A)
Healthcare
Biotechnology companies, hospital management corporations, medical equipment manufacturers, and a variety of other businesses make up the healthcare industry. People will always require medical assistance, therefore the sector is viewed as both a development opportunity and a defensive move.
The following are the most popular healthcare ETFs:
- SPDR Health Care Select Sector (XLV A)
- Vanguard Health Care ETF (VHT A+) Nasdaq Biotechnology ETF (IBB B+)
Industrials
Aerospace, defence, machinery, construction, fabrication, and manufacturing companies make up the industrial sector. Demand for building construction and manufactured products such as agricultural equipment are driving the industry’s expansion in general.
The following are the most popular industrial ETFs:
- SPDR Industrial Select Sector (XLI A)
- Vanguard Industrials ETF (VIS A+) is a Vanguard ETF that invests in industrials.
- Transportation Average ETF (iShares) (IYT A)
Technology
Electronics makers, software developers, and information technology enterprises make up the technology industry. In general, upgrade cycles and the state of the economy drive these enterprises, albeit growth has been strong in recent years.
The following are the most popular technology ETFs:
- SPDR Technology Select Sector (XLK A)
- Vanguard Information Technology ETF (VGT A+) is an exchange-traded fund that invests in information technology.
- DJ Internet Index Fund (FDN B+) is a mutual fund that invests in the internet.
Telecom
Wireless providers, cable companies, internet service providers, and satellite firms are all part of the telecom sector. Consumers provide ongoing revenue to these businesses in general, although some segments of the sector are undergoing rapid transformation.
The following are the most popular telecom ETFs:
- Vanguard Telecom ETF (VOX A+) is an exchange-traded fund that invests in the telecom industry.
- iShares US Telecommunications ETF (IYZ B+) is a mutual fund that invests in the US telecommunications industry.
- Global Telecom ETF (iShares) (IXP A-)
Conclusion
These are the different sectors of stock market that one can enjoy.
