The S&P 500 is divided into 11 market sectors based on the Global Industry Classification Standard (GICS). The GICS sorts companies into particular sectors based on their primary business activities. Investors can then use the sector classifications to ensure that their portfolios are fully diversified and not overly exposed to one particular area of the economy.
Investors can also use sector classifications to increase their exposure to particular themes, such as technology or energy. To understand how best to balance your sector exposure in your portfolio, you must first understand what types of stocks are in each sector.
Here’s a look at each of the 11 stock market sectors, and some of the most notable companies within each one.
This post originally appeared at U.S. News & World Report.