Glossary

A sector in finance refers to a specific area or segment of the economy that includes companies that share similar characteristics or operate in the same industry.

Sectors are used to classify businesses based on their products or services, allowing investors to easily compare and analyse companies within the same industry. This categorisation helps investors to diversify their portfolios and track economic trends across various industries. 📊🌐

For example, some major sectors include technology, healthcare, financials, consumer goods, and energy. Within each sector, there can be further subdivisions known as industries (eg. the technology sector includes software, hardware, and internet companies).

Fun fact: The Global Industry Classification Standard (GICS) is a widely accepted classification system that sorts companies into 11 sectors and further breaks them down into 24 industry groups, 69 industries, and 158 sub-industries. This system was created by MSCI and S&P Dow Jones Indices in 1999. 🌍📑