The 11 Sectors of the Stock Market – ETFs For All

by Robo13

The stock market is often broken up into a few different categories that gives a general overall look at the economy. With the markets recent crash, the next few months will have some great buying opportunities for a lot of industries.

One of the easiest ways to invest is through ETFs. Below are some of the different industries that make up the entire economy. I have listed some ETFs that I believe are some of the best ones for each category. Check them out and let me know what other good ones I missed.

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— Technology —

The technology sector consists of electronics manufacturers, software developers and information technology firms. In general, these businesses are driven by upgrade cycles and the general health of the economy, although growth has been robust over the years.

  • First Trust Dow Jones Index ($FDN)
  • Vanguard Information Tech Index ($VGT)

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— Utilities —

The utilities sector consists of electric, gas and water companies as well as integrated providers. In general, the sector generates consistent recurring income by charging consumers and businesses that provide higher-than-average dividend yields.

  • iShares S&P Global Infrastructure ETF ($IGF)
  • Vanguard Utilities ETF ($VPU)

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— Healthcare —

The healthcare sector consists of biotechnology companies, hospital management firms, medical device manufacturers and many others. In general, the sector is considered to be both a growth opportunity and defensive play since people will always require medical aid.

  • iShares NASDAQ Biotechnology ETF ($IBB)
  • Vanguard Health Care ETF ($VHT)

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— Industrials —

The industrial sector consists of aerospace, defense, machinery, construction, fabrication and manufacturing companies. In general, the industry’s growth is driven by demand for building construction and manufactured products like agricultural equipment.

  • iShares Transportation Average ETF ($IYT)
  • Vanguard Industrials ETF ($VIS)

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— Telecom —

The telecom sector consists of wireless providers, cable companies, internet service providers and satellite companies, among others. In general, these companies generate recurring revenue from consumers, but some subsets of the industry are facing rapid change.

  • iShares U.S. Telecommunications ($IYZ)
  • Vanguard Communication Services ($VOX)

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— Energy —

The energy sector consists of oil and gas exploration and production companies, as well as integrated power firms, refineries and other operations. In general, these companies generate revenue that’s tied to the price of crude oil, natural gas and other commodities.

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— Consumer Staples —

The consumer staples sector consists of food and beverage companies as well as companies that create products consumers are unwilling to cut from their budgets. In general, these companies are defensive plays capable of withstanding an economic downturn.

  • First Trust Cons. Staples AlphaDEX ($FXG)
  • Vanguard Consumer Staples ($VDC)

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— Materials —

The materials sector consists of mining, refining, chemical, forestry and related companies that are focused on discovering and developing raw materials. Since these companies are at the beginning of the supply chain, they are vulnerable to changes in the business cycle.

  • VanEck Vectors Gold Miners ($GDX)
  • iShares U.S. Home Construction ($ITB)
  • Materials Select Sector SPDR ($XLB)

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— Consumer Discretionary —

The consumer discretionary sector consists of retailers, media companies, consumer service providers, apparel companies and consumer durables. In general, these companies benefit from an improving economy when consumer spending accelerates.

  • Vanguard Consumer Discretion ($VCR)

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— Financials —

The financial sector consists of banks, investment funds, insurance companies and real estate firms, among others. In general, the majority of the revenue generated by the sector comes from mortgages and loans that gain value as interest rates rise.

  • SPDR S&P Bank ($KBE)
  • Vanguard Financials ($VFH)

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— Real Estate —

The real estate sector consists of companies invested in residential, industrial, and retail real estate. The main source of revenue for these companies comes from rent income and real estate capital appreciation. As a result, this sector is sensitive to interest rate changes.

  • Vanguard Global ex-U.S. Real Estate ETF ($VNQI)
  • Schwab US REIT ($SCHH)
  • Vanguard Real Estate ($VNQ)

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I plan on buying these ETFs every week after the next sell off 50/50 or 33/33/33 for each sector. And allocating my total percents as:

Technology – 25%
Utilities – 18%
Healthcare – 16%
Industrials – 10%
Telecom – 10%
Energy – 9%
Consumer Staples – 3%
Materials – 3%
Consumer Discretionary – 2%
Financials – 2%
Real Estate – 2%

M1 Finance Pie with all this added: m1.finance/-30zYl69_AG0

Sources: etfdb.com/etf-education/the-10-sectors-of-the-stock-market/

 

Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.