Investing in Different Industry Sectors

Different industry sectors each display some key characteristics that may either attract or repel equity investors

Alanna Petroff 19 February, 2013 | 6:00AM

This article is part of Morningstar.co.uk's Equity Investing Week.

When people look at investing in equity markets, they may focus on investing in specific sectors because they believe these sectors will help them reach their financial goals. For example, some sectors may typically be less volatile, which would appeal to investors who are focused on predictability and capital preservation. Meanwhile, other sectors that have more growth prospects and higher volatility may appeal to investors with a higher risk tolerance.

Many fund managers also focus on sector-specific investments. In some cases, fund managers may only focus on investing in one sector, such as the technology sector or the healthcare sector. Additionally, some fund managers may invest in a range of sectors and companies, but veer away from certain sectors (i.e. the financial services sector) if they don’t like the current prospects for that sector.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.

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