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SectorA group of listed companies operating in the same industry. In order to help investors compare the performance of similar companies, the share prices and financial ratios of these companies are reported together in newspapers.Example sectors:Entertainment and HotelsGeneral RetailersElectrical and Electronic equipmentBeveragesIn deciding whether a share price is good value or bad value, it helps to look at companies in the same sector. If Company A is on a P/E of 15 and Company B is on a P/E of 26, and they are both in toy retailing, you would certainly want to find out why before buying either. You would also want to compare the P/Es to the average P/E of the whole sector.If you plan to run a diversified portfolio in order to minimise risk, one way to do this is to make sure that you have no more than 2 shares in each sector. So a portfolio of 20 shares might span 10 sectors. The logic is that different sectors react to economic conditions in different ways, so a portfolio with shares across a number of different sectors maybe at less risk than one heavily concentrated in one sector.In February 2000 FTSE International launched a set of global sector indices, reflecting the shift by fund managers away from country-driven portfolio management towards sector-driven portfolio management. The indices cover:autosbanksbasic industriesenergyfinancialsgeneral industriesmediapharmaceuticaltechnologytelecommunicationsutilitiesFor each sector the indices include the most widely traded blue chip stocks, and their purpose is to give investors benchmarks against which to measure performance, and for which to create retail products such as exchange-traded funds.SectorUsed to characterize a group of securities that are similar with respect to maturity, type, rating, industry, and/or coupon.Sector Similar MatchesIntramarket sector spreadIntramarket sector spreadThe spread between two issues of the same maturity within a market sector. For instance, the difference in interest rates offered for five-year industrial corporate bonds and five-year utility corporate bonds. Tax exempt sectorTax exempt sectorThe municipal bond market where state and local governments raise funds. Bonds issued in this sector are exempt from federal income taxes. Sector, Inc.Sector, Inc.In the US, Sector, Inc., is a wholly owned subsidiary of the US Securities Industry Automation Corporation (SIAC). It provides a variety of communications and outsourcing services to organisations that require high-availability for critical operations in both data center and network operations. SIAC operates all systems for the New York Stock Exchange, the American Stock Exchange, the National Market System, the National Securities Clearing Corporation (NSCC) and its affiliates, the International Securities Clearing Corporation (ISCC) and the Government Securities Clearing Corporation (GSCC). Market sectorsMarket sectorsThe classifications of bonds by issuer characteristics, such as state government, corporate, or utility. Public Sector Borrowing RequirementPublic Sector Borrowing RequirementSee 'Public Sector Net Cash Requirement (PSNCR)'. Further SuggestionsIntermarket sector spreadsector fund Sector allocation Sector diversification Sector fund Public Sector Net Cash Requirement Sector rotation |
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