Industry exposure

Industry exposure refers to the extent to which an investment or portfolio is affected by the performance of a specific industry or sector. For example, if a fund invests heavily in technology companies, it has high technology sector exposure, meaning its success or failure is closely linked to that industry's health. Managing industry exposure helps investors diversify risk and avoid over-reliance on a single sector’s performance. It allows investors to balance potential opportunities and risks across different parts of the economy, aligning investments with their broader financial goals and risk tolerance.