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A stock market sector is a group of publicly traded companies that work in the same field. The Global Industry Classification Standard (GISC), created by S&P Dow Jones Indices and MSCI in 1999, developed a framework with four categories that classify businesses into 11 sectors, 24 industry groups, 69 industries, and 158 sub-industries. The framework is widely used and is the foundation for many mutual and exchange-traded funds (ETFs).
The 11 GICS stock market sectors are:
1. Energy Sector
Companies that work with energy sources, equipment, and services make up the energy sector. Stocks in the industrial sector include companies that manufacture capital goods like aircraft, electrical devices, industrial machinery, and defense equipment; and companies that manage railroads, airlines, and logistics services; and significant engineering firms that construct roads, bridges, and ships.
ExxonMobil and Chevron are two of the biggest businesses in the energy industry.
2. Materials Sector
The second stock market sector on the list is “materials.” Companies that produce a range of products for manufacturing and other applications are categorized as the materials industry. The materials industry includes companies producing chemicals, building materials, containers, packaging, mining stocks, and businesses specializing in producing paper and forest products.
Sherwin-Williams and DuPont are two of the companies with solid foundations in the industry.
3. Industrials Sector
The industrial sector contains a broad range of companies that generally make heavy machinery. The industrial sector includes businesses in the aerospace, defense, construction, and engineering sectors and transportation equities, including railways, airlines, and logistics firms. This sector includes businesses that produce machinery, electrical equipment, building materials, and several conglomerates.
Union Pacific and Boeing are the largest companies in the industrial sector.
4. Utilities Sector
A utility sector is a group of private businesses that deliver utilities like water, electricity, and natural gas. Even though most companies are private, they are still a part of the public-service industry.
Some of the biggest companies in the industrial industry are Union Pacific, Honeywell, and Boeing.
5. Healthcare Sector
Stocks of companies that operate in various health-related industries, such as pharmaceutical producers, medical equipment providers of healthcare services, stocks of biotech, and insurance businesses, make up the healthcare industry.
Pfizer and UnitedHealth Group (UNH) (PFE) are examples of large healthcare companies.
6. Financials Sector
Companies involved in finance make up the financials sector. Banks, mortgage, financial services, consumer finance, asset management, capital markets, financial exchanges, REITs, insurance, and other industries are under this sector.
JPMorgan Chase, Visa, and Berkshire Hathaway are examples of the biggest businesses in the financial industry.
7. Consumer Discretionary Sector
Companies that make products customers want but may not need comprise the consumer discretionary sector. They do well when the economy is flourishing but poorly when it is weak, so these businesses are often cyclical.
Consumer discretionary, according to Mychal Campos, Betterment’s head of investment, refers to luxury goods that customers purchase but are not essential for living. These luxury goods include vehicles, jewelry, sports equipment, automotive, and electronics.
Amazon, Tesla, and Home Depot are a few of the giant corporations in the consumer discretionary industry.
8. Consumer Staples Sector
Contrary to consumer discretionary, the consumer staples sector does well in any financial situation. Because people always need the goods, this sector provides. Companies in the food, beverage, and tobacco sectors and home goods and cosmetics manufacturers fall under this category. This category also includes retailers, such as supermarkets, that focus on selling essentials.
Two of the most key consumer staples stocks in the US market are Coca-Cola and Procter & Gamble.
9. Information Technology Sector
Companies involved in various types of technological advancement are included in the information technology sector. While some information technology businesses focus on developing software or offering services, others are mainly involved in developing the tools, parts, and hardware that facilitate technology.
Apple and Microsoft are two of the biggest companies in the technology sector.
10. Communication Services Sector
Companies in the media & entertainment, and telecommunication sectors make up the communication services sector. The telecommunication companies offer wireless, fiber-optic, cable, and internet services. While the media and entertainment companies provide media and broadcasting, entertainment , streaming services, social media, etc.
Among the most popular stocks in the communication services sector are Alphabet and social media giant Facebook
11. Real Estate Sector
Real estate sector typically consists of two forms. Firts, the companies that are in charge of creating new real estate projects and managing them by finding tenants for different spaces on the project’s real estate. Second, the real estate companies that are managing the real estate investment trusts (REITS) which acquire a number of income-producing assets, such as office buildings and hotels.
American Tower Corp. (AMT) and Simon Property Group (SPG) are two of the largest real estate companies.
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