Chapter: 6 Understanding Return

Section: 7 Specific Sector Return

Similar to market return, sector performance can be measured using the sector index or sector capitalization. 


The following formula could be adopted to ascertain the sector return.


Specific sector return(%) =

End of year sector index – Beginning of year sector index

x 100

Beginning of  year sector index


Total dividend paid by sector the joint stock companies

Current market capitalization of the sector


Sector return can be used to compare individual stock performance of the same industry with the respective sector.