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Discover the power of sector investing

Sector investing can help protect you against market downturns by diversifying your asset allocation and offer another way to strengthen your portfolio.

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Learn more about sector investing

What is sector investing?

Sector investing is the practice of investing in one or more sectors of the economy. There are 11 main sectors across equity markets: Energy, financials, health care, information technology, consumer discretionary, consumer staples, materials, communication services, industrials, utilities and real estate.

Who is sector investing for?

Sector investing can be appropriate for strategic, long-term investors as well as investors looking to manage a portfolio tactically. Strategic investors can use sector investing to take advantage of potential long-term trends in certain sectors. Tactical investors can invest in sectors over shorter time spans to potentially enhance returns or increase protection at different stages throughout a market cycle.

Why consider sector investing?

Sector investing can help investors enhance diversification or invest opportunistically. By investing in multiple sectors across the equity market, investors can help protect against the risk of any one sector lagging in the broader stock market. Diversifying across sectors can also help mitigate risk throughout a market cycle. On the other hand, some may choose to invest in specific sectors outside their diversified portfolios to potentially enhance returns or increase protection.

Why choose sector investing with J.P. Morgan

  • Explore a range of sector investing opportunities, from individual stocks to sector-based funds and ETFs.
  • Use our watchlists and search tools to create a portfolio that suits your sector-based goals.
  • Stay ahead with relevant market data for each sector from our market research team.
  • Get the tools you need to manage your sector investing online or on your phone.

However you choose to invest, we’re here to help you make the most of your money.

WORK ONE-ON-ONE WITH AN ADVISORJ.P. Morgan
Private Client Advisor

Work 1:1 with a dedicated advisor in your local community to create a personalized financial strategy and build a custom investment portfolio.

WORK ONE-ON-ONE WITH AN ADVISORJ.P. Morgan
Private Client Advisor

Work 1:1 with a dedicated advisor in your local community to create a personalized financial strategy and build a custom investment portfolio.

INVEST ON YOUR OWNJ.P. Morgan
Self-Directed Investing

Build your investment portfolio on your own with unlimited $0 commission online trades.

INVEST ON YOUR OWNJ.P. Morgan
Self-Directed Investing

Build your investment portfolio on your own with unlimited $0 commission online trades.

Frequently asked questions

Sector investing is the practice of investing in one or more sectors of the economy. There are 11 main sectors across equity markets: Energy, financials, health care, information technology, consumer discretionary, consumer staples, materials, communication services, industrials, utilities and real estate.

Sector funds are exchange-traded funds (ETFs) or mutual funds that are focused on a particular sector. As with any investment, sector funds can be risky, especially for more typically cyclical sectors such as energy or financials.

There are 11 market sectors, as generally defined. They are energy, financials, health care, information technology, consumer discretionary, consumer staples, materials, communication services, industrials, utilities and real estate.

While businesses within a sector typically share characteristics, they may also be quite different from one another. For example, the materials sector contains chemical companies as well as mining and paper product firms. The health care sector includes manufacturers of medical devices in addition to service providers such as telehealth firms.

Thematic investing is typically a longer-term investment strategy that relies on predictions of market trends or “themes.” These themes often cut across sectors.

Thematic investing differs from sector investing in that it is broader in its approach. It groups stocks according to common features regardless of sector. Thematic investing is also seen as a potential way of aligning portfolios while capitalizing on long-run trends.

A sector rotation strategy involves moving investments from one sector to another in response to changing market conditions. For example, the consumer discretionary sector is generally considered a positive investment in periods of economic growth. In contrast, the consumer staples sector, which includes essentials such as food, typically holds steady even when the economy is tightening.

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