Investing Ideas

The case for using a sector based framework in equity portfolio construction

Sector exposure has been a major driver of stock returns and can be an effective way to seek an objective and manage portfolio risk.

By: Denise Chisholm
Updated: 11/27/2024
Key Takeaways
  • Using a sector-based framework to build equity portfolios can help investors achieve a variety of investment objectives and manage portfolio risk.
  • Beyond company-specific factors, sector exposure has been the most influential driver of the variability in equity market returns over time, yet sector-based portfolio construction remains an underutilized strategy in the marketplace.
  • Equity sectors have a variety of attributes, including stable classification, consistent earnings drivers, high return dispersion, clear volatility patterns, and low correlations, which together can help investors generate an efficient portfolio.
Get the full white paper
The case for using a sector-based framework in equity portfolio construction
Download PDF
Explore more on:
Asset allocation Equity Portfolio construction Sectors
Next steps to consider

Investments & portfolio construction

Manage client portfolios with greater efficiency and impact with our broad universe of portfolio construction solutions and investment products.

Learn more

Fidelity Portfolio Quick Check

Analyze, compare, and optimize your investment strategy in minutes with our free on-demand digital portfolio analysis tool.

Learn more


  • For important information, see the full linked content.
1136392.2
9E102CE0479447589147A1A295F0263D