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12 Sectors of the Stock Market | Lionbliss Research

Energy

Technology

Health Care

Financials

Real Estate

Materials

Consumer Discretionary

Industrials

Utilities

Consumer Staples

Communications

Cryptocurrency

Energy

The energy sector includes companies engaged in exploration and production of oil and other hydrocarbons, refining, the transportation of oil and gas, and production of oil and gas equipment. The sector is generally mature with modest growth.

  • Some of the best-known companies: Chevron, ExxonMobil, Halliburton

  • Popular sector ETF: Vanguard Energy ETF (VDE)

Materials

The materials sector includes companies that produce chemicals, glass, paper, forestry products, metals, packaging, construction materials and steel. It tends to be a mature industry with modest growth potential.

  • Some of the best-known companies: Dow, DuPont, Sherwin-Williams

  • Popular sector ETF: iShares Global Materials ETF (MXI)

Industrials

The industrials sector includes companies that manufacture aerospace and defense products, electrical equipment and construction equipment. It also includes companies providing security services, employment services, professional services and transportation services. This sector may show strong growth during economic booms.

  • Some of the best-known companies: 3M, Caterpillar, Delta Air Lines

  • Popular sector ETF: Vanguard Industrials ETF (VIS)

Consumer discretionary

The consumer discretionary sector includes companies that produce cars, durable goods, clothing and leisure equipment. It also includes restaurants, hotels and consumer retailing, among others. This sector is sensitive to economic cycles, so when the economy grows, these companies tend to grow much more quickly, though when it slows, this industry typically slows even more.

  • Some of the best-known companies: Amazon, Ford Motor Company, Home Depot

  • Popular sector ETF: Vanguard Consumer Discretionary ETF (VCR)

Consumer staples

The consumer staples sector includes companies that produce food, drinks and tobacco, and non-durable household goods as well as those retailers that sell food and drugs, including retailing supercenters. This industry tends to be mature with modest growth.

  • Some of the best-known companies: Coca-Cola, Procter & Gamble, Walmart

  • Popular sector ETF: Consumer Staples Select Sector SPDR Fund (XLP)

Health care

The health care sector includes companies that provide health care services, as well as health care equipment and technology. It includes companies at all stages of pharmaceutical and biotech research, development and production. This sector can be dynamic and exhibits above-trend growth, with some very quickly growing companies.

  • Some of the best-known companies: Pfizer, Johnson & Johnson, UnitedHealth

  • Popular sector ETF: Vanguard Healthcare ETF (VHT)

Financials

The financials sector consists of companies involved in banking, including mortgage and consumer finance, as well as investment banks, brokerage firms and insurance companies. The sector has shown robust growth and profitability, but can be affected significantly by the trend of interest rates, causing cyclicality.

  • Some of the best-known companies: Bank of America, Berkshire Hathaway, JPMorgan Chase

  • Popular sector ETF: Financial Select Sector SPDR Fund (XLF)

Information technology

The information technology sector includes companies that produce software and other IT products and services. It also contains companies that manufacture hardware such as communications equipment, mobile phones, computers and semiconductor equipment. This sector has been a fast grower and contains some of the market’s largest companies.

  • Some of the best-known companies: Apple, Microsoft, Nvidia

  • Popular sector ETF: Vanguard Information Technology ETF (VGT)

Communication services

The communication services sector includes telecommunication and media companies, entertainment companies and those producing content and interactive games. This sector can offer significant growth opportunities as the world moves more online, but older companies face significant challenges from more dynamic entrants.

  • Some of the best-known companies: Disney, Facebook, Verizon

  • Popular sector ETF: Vanguard Communication Services ETF (VOX)

Utilities

The utilities sector includes companies providing electricity, gas and water (from conventional and environmentally friendly sources) as well as energy traders and distributors of energy. This sector is generally a slow and steady performer, rather than a growth sector. But “green” energy offers the promise of higher returns, although with higher risk.

  • Some of the best-known companies: Dominion Energy, Duke Energy, NextEra Energy

  • Popular sector ETF: Utilities Select Sector SPDR Fund (XLU)

Real estate

The real estate sector includes real estate services companies, real estate developers and equity REITs. This sector may offer strong growth opportunities, but shows steady growth overall.

  • Some of the best-known companies: American Tower, Public Storage, Simon Property Group

  • Popular sector ETF: Vanguard Real Estate Index Fund (VNQ)

Cryptocurrency

Digital medium of exchange using cryptography on a ledger to secure transactions and to verify transfer of ownership.


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