What is Industry Exposure?
Industry: An industry is a group of companies that are related based on the products and services the company provides to generate revenues.
Some of the largest industries in the world are Insurance, Banking, Healthcare, Transportation (including automobiles), and Oil & Gas.
Investments grouped by industry usually have connected sources of risk. For example even the most effectively run Oil & Gas companies are affected by the price of Oil. Having all your investments in this sector creates exposure to all the risk in this industry.
On the flip side, portfolios that have little exposure to the Internet, have missed out on astronomical gains over the last two decades.
Creating Industry Exposure
You will want to diversify against these risks by including investments exposed to different industries in your portfolio. Some ways you can do this on EquitySim are:
Using the themes screener on the ETF page:
Using Industry screener on the Stock page:
