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A Straightforward Analysis of Sector Portfolios in the US Stock Market


  • Francisco JAREÑO
  • Loredana NEGRUT


This research focuses on analysing the US stock market in recent years –specifically the US stock market, that is, Dow Jones index, and six sector portfolios (Financials, Energy, Technology, Health Care, Consumer Discretionary and Telecommunications)-. All sectors achieve higher returns than expected according to the CAPM (except the “Consumer Discretionary” sector). Moreover, this fact is confirmed with the Security Market Line (SML). Thus, these results help investors to choose the most suitable sectors in the investment horizon. Therefore, this research includes relevant implications to portfolio managers to reduce the risk and maximize the return.

Suggested Citation

  • Francisco JAREÑO & Marta TOLENTINO & Loredana NEGRUT, 2016. "A Straightforward Analysis of Sector Portfolios in the US Stock Market," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 16(1), pages 105-114.
  • Handle: RePEc:eaa:aeinde:v:16:y:2016:i:1_9

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    References listed on IDEAS

    1. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
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    More about this item


    US Stock Market; CAPM; Portfolio Management; Sector Analysis;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada


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