Sector Weightings

Welcome to sector weightings. Stocks fall into one of three "super" sectors—cyclical, sensitive, and defensive—which are subdivided into sectors, bringing the total number of sectors to 11. The cyclical supersector includes the basic materials, consumer cyclical, financial services, and real estate sectors. In the sensitive supersector, there are the communication services, energy, industrials, and technology sectors. And finally, in the defensive supersector, there are the consumer defensive, health-care, and utilities sectors. Morningstar calculates a fund's sector exposure based on the amount of assets it has in stocks in each sector. By knowing how heavily a fund invests in a given sector, you'll know how vulnerable it is to a downturn in that part of the market or how much sector risk it's taking on.