ETFs can be purchased and traded like stocks, but because they are diversified,
losses in a given sector may be cancelled out by gains in another.
This discretion includes the right to «enact changes to their support schemes, for example to avoid overcompensation or to address unforeseen developments such as a particularly rapid expansion of a precise renewables
technology in a given sector».
Definition: Market neutral investing attempts to remove the market risk from their portfolios by being both long and
short in a given sector.
If you have an ownership stake in a fantastic business with great returns on capital, a strong competitive position that makes it difficult to
unseat in its given sector or industry, and a board of directors that is shareholder - friendly, it shouldn't cause you any particular distress to watch your holdings decline by 50 percent or more on paper.
If I can own an
ETF in a given sector over one single stock that would be the way to go at simplification and risk reduction.
Indeed, business history is rife with examples of organizations that first anticipate a given need, and by executing on that need ahead of competitors they become the defining brand that consumers
identify in their given sector.
As the TCFD highlighted, investors need a way to compare the risk of one company versus
another in a given sector.