Sector Allocation

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Sector allocation

Investment of certain proportions of a portfolio in certain sectors. See: Industry allocation.

Sector Allocation

The act or practice of including securities in different industries in one's portfolio. This is done to reduce systemic risk. For example, if one includes both Industry A and Industry B stocks in one's portfolio, and most Industry A companies go bankrupt, this will not necessarily affect Industry B stocks. Industry allocation thus increases the possibility of making a profit, or at least avoiding a loss. This may also reduce the expected return on a portfolio, but it depends on the level and type of diversification. In general, the broader the industry allocation, the less risk and the less return. See also: Horizontal diversification, Vertical diversification.

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Industry Allocation			The sector allocation is concentrated on the cyclical sectors of Industrials and Materials. Global View from Sarasin Research: "We are on the brink of an upswing" by Albawaba.com Changes in sector allocation indicate a movement out of the most defensive stocks, such as in pharmaceuticals -- where a net 30 per cent are now overweight the sector, down from a net 37 per cent in February. Merrill Lynch finds growing optimism in economy by TradeArabia (Manama, Bahrain) Finally, given the variable nature of top-down diversification opportunities, investors who use mainly country allocation or mainly sector allocation may find their GCC opportunities restricted from time to time, while those who work across country and sector borders in stock selection may be better positioned at reaping the region's diversification benefits. Are GCC fund managers following the correct strategy? by Gulf News (United Arab Emirates)			Secteur public section Section 1031 Section 1035 Exchange Section 121 Section 1221 Section 1223 Section 1231 Gain or Loss Section 1231 Property Section 1245 Section 1245 property Section 1250 Section 1256 Contracts Section 16 Section 167 Section 179 Section 179 Expense Deduction Section 31 Fee Section 423 Section 482 Section 521 Section 8 housing Section 83 Section 83(b) Election Sector Sector Allocation Sector Analyst Sector diversification Sector economico clave Sector Equity Fund Sector Fund Sector gobierno Sector industrial Sector Neutral Index Fund Sector Rotation sector swap sector theory Secular Secular Market Secular Trend Secured Bond Secured Credit Card Secured Creditor Secured Debt Secured Lease Obligation Bond Secured Liability Secured Loan Secured Note Securite alimentaire Securities Securities & Exchange Commission			sectioning, surgical Sectionize sections sections sections sections sections sections Sections Européennes ou de Langues Orientales Sections Internationales de Sèvres sections off sections off sections off sections off sections off sections off Sectism Sectist Sectiuncle SECTLV sector sector sector sector sector sector sector Sector Air Defense Commander Sector Air Operations Center Sector Air Warfare Commander Sector Allocation Sector Analyst Sector Analysts Sector Anti Air Warfare Commander Sector Anti-Air Warfare Facility Sector Anti-Submarine Warfare Commander Sector Anti-Surface Warfare Coordinator Sector Antiair Warfare Coordinator/Center sector boundary Sector Budget Framework Paper Sector Command Center Sector Commander Sector Competitiveness Framework sector controller Sector Controller Shelf Sector Design Analysis Tool sector disk sector display Sector diversification Sector dump Sector economico clave Sector editor Sector Education and Training Authority Sector Emergency Control Officer Sector Equity Fund

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