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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 MatchesSector diversificationSector diversificationConstituting of a portfolio of stocks of companies in each major industry group. 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). Intramarket 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. Sector allocationSector allocationInvestment of certain proportions of a portfolio in certain sectors. See: Industry allocation. Public Sector Net Cash RequirementPublic Sector Net Cash RequirementFormerly known as Public Sector Borrowing Requirement (PSBR), PSNCR is the difference between the expenditure of the public sector and its income. Where there is a deficit it is financed by borrowing - principally via the sale of government gilt edged stocks (gilts).Public sector net borrowing also measures the difference between the expenditure and income of the public sector but differs from the net cash requirement in that it is measured on an accruals basis whereas the net cash requirement is mainly a cash measure. Further SuggestionsPublic Sector Borrowing RequirementSector rotation Sector fund Intermarket sector spread sector fund Tax exempt sector Market sectors |
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