What is the difference between a sector, industry and peer group?

A sector is the second level grouping of the Morningstar system.

An industry is the bottom level grouping of the Morningstar system. There are 148 industry groups.

A peer group is a group of similarly sized companies within a single industry group. The size groupings follow BetterInvesting’s recommendations for size breakdown: a Small company has annual sales of less than 1 Billion dollars, a Medium company has annual sales greater than or equal to 1 Billion dollars and less than 10 Billion dollars, a Large company has annual sales greater than 10 Billion dollars.

Tags: peer, size classification