Many investors may not be aware that on August 31, 2016, real estate was carved out of the financials sector to become the 11th equity sector within the GICS structure. Join Fidelity professionals in this recorded webinar to understand how this could impact your portfolio and what you want to consider if considering investing in this new sector. You will hear how this GICS structure change may cause increased volatility in the financials sector, the potential positive exposure to long-term interest rates and how the new real estate sector may perform versus other sectors.
The principles of portfolio diversification and asset allocation do not apply merely to broad asset categories such as stocks and bonds. They also apply to subsets of the equity universe such as sectors.
One way to invest with the business cycle and diversify an equity portfolio is using sector-based securities and funds. In order to employ this type of strategy, you should know how sectors and industries are comprised.
Real estate is a cyclical industry that is sensitive to interest rates, economic conditions (both nationally and locally), property tax rates, and other factors.
Changes in real estate values or economic conditions can have a positive or negative effect on issuers in the real estate industry.
Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.
Fidelity Guided Portfolio SummarySM (Fidelity GPSSM) is an enhanced analytical capability provided for educational purposes only.
Views expressed are as of the date indicated and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author, as applicable, and not necessarily those of Fidelity Investments.