What is really in your portfolio? Morningstar classification in FundStat

A portfolio with twenty positions can still depend heavily on one part of the economy. Different tickers, brokers, and trading currencies do not necessarily mean different underlying businesses. A broad ETF can also add exposure to sectors you already own through individual shares.

Morningstar is an investment research and data company. Its business classification groups companies by what they do, while its regional framework groups countries. Together, they help describe both the economic and geographic composition of a portfolio.

The February 2026 Morningstar Global Entity Classification Structure contains 11 sectors and 156 industries. A sector gives a broad view of a business; an industry adds detail. Regions provide a separate geographic perspective.

How Morningstar classification works

Start with the broad sectors, look at the industries within them, then add geography.

01 / Sectors

Start with the broad economic picture

Morningstar groups its 11 sectors into three super sectors. Cyclical businesses tend to be more affected by economic swings; defensive businesses serve more persistent needs; sensitive businesses sit between them.

02 / Industries

Look inside a sector

Morningstar assigns a company to the industry that best describes its business, using revenue and income as key evidence. For example, application software and semiconductors are distinct industries within Technology. The sector shows what these companies have in common; the industry helps distinguish their activities.

• A business using an app or a website does not automatically belong to Technology. What the business actually sells matters more than the channel it uses to reach customers.

03 / Regions

Add the geographic perspective

Morningstar’s ten-region framework groups countries into regions, which in turn belong to the Americas, Greater Europe, or Greater Asia. Saudi Arabia belongs to Africa/Middle East. These are broad geographic groupings: a regional allocation can include exposure to just one of the countries in that region.

• A company’s region describes its geographic classification. It does not show where all its customers or revenue are located.

Morningstar in FundStat: one ETF, three perspectives

FundStat uses this taxonomy to classify companies and show the available sector and regional allocations of ETF equity holdings. Take IKSA on the London Stock Exchange: iShares MSCI Saudi Arabia Capped UCITS ETF USD (Acc). It trades in US dollars in London and provides exposure to Saudi Arabian equities.

01 / Sectors

One ETF, several sectors

In Sectors, FundStat breaks IKSA down using the sector allocation of its equity holdings. In this example, Financial Services accounts for 47.6%, Energy for 14.7%, and Basic Materials for 14.1%. The remaining allocation is spread across other sectors.

• Each sector contributes to the whole portfolio in proportion to the value invested in the ETF. If IKSA represented half of a portfolio, its 47.6% Financial Services allocation would contribute about 23.8% to that portfolio.
• Industries works differently: ETFs stay in their own category there. The detailed industry view applies to individually classified share positions.

02 / Listing countries

United Kingdom: where you bought the listing

Switch to Listing countries and the same position appears under the United Kingdom. IKSA is listed on the London Stock Exchange, so its entire value is assigned to the United Kingdom in this view.

• This view answers where the instrument is listed. The location of its underlying investments is shown in Regions.

03 / Regions

Africa/Middle East: where the equity exposure belongs

In Regions, IKSA appears under Africa/Middle East because its equity holdings provide exposure to Saudi Arabia. The expanded row shows that 100% of the ETF’s equity portion belongs to this region.

• Saudi Arabia is part of the combined Africa/Middle East region. The highlighted map represents that whole category; it does not mean IKSA invests in every highlighted country.

• Morningstar: Global Entity Classification Structure, February 2026 (methodology and sector hierarchy)
• Morningstar: original Regions methodology, 2004
• iShares: IKSA fund details and exchange listings

Explore your own breakdown in the FundStat dashboard.