Sectors are the categories you would choose to diversify your Asset Classes. Sectors are the streets that run through your Asset Class neighborhoods. While the same street may run through several neighborhoods, to find a specific location, you narrow your search to a specific neighborhood.
- Sectors should reflect your investment philosophy and define the categories you would use to fully cover investing in your Asset Classes. If you don’t use a sector, don’t create a code for it.
- The most common Sector codes include: Large Cap, Mid Cap, Small Cap, Short Bond, Long Bond, etc.
- Many managers use Sectors only for internal reporting (if at all) because many clients do not understand the Sectors.
- Many managers do NOT use sectors at all in PortfolioCenter
- Sectors can only be used for sorting purposes on reports (no performance).
- Models may be based on Sectors, but Targets cannot.