Why Industry Sector Diversification?
With just a few industry sectors represented in a portfolio, the chances are greater that the sectors are highly correlated. If so, then the major advantage of diversification in reducing risk can easily be lost or diminished.
The expertise of Dow Jones Indexes and FTSE has made the Industry Classification Benchmark a relevant and user-friendly classification standard for trading and investment decisions.
The ICB divides the market into increasingly specific categories, allowing investors to compare industry trends between well-defined subsectors.
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