Sector tilt

Sector tilt measures whether a portfolio is over- or under-exposed to industry groups relative to the market. The standard reference is GICS — the 11-sector classification used by most North-American index providers.

A tilt can be deliberate (the investor has a view on energy, tech, or financials) or emergent (a handful of winners have grown into outsized positions). Either way, the portfolio's return deviation from the benchmark will be partly attributable to the sector-weight gap.

The Canadian market is itself sector-tilted vs. the world. The S&P/TSX Composite is ~30% financials and ~15% energy, roughly double each sector's share of global market cap. A Canadian investor holding a "diversified" TSX index fund is still running a Canadian sector tilt by global standards.