A category of stocks of large corporations with diverse and often unrelated business units. Conglomerates are sometimes referred to as multi-industry companies which are involved in a variety of business functions simultaneously.
Though comprised of diversified companies, the conglomerates sector closely follows the performance of the S&P 500 index. Conglomerates as a business type are less popular now than they were in the 1960s, mostly because large companies have difficulty managing unrelated business units effectively.