Sector & Industry Equity

Sector-focused mutual funds and ETFs invest the majority of their assets in... Sector-focused mutual funds and ETFs invest the majority of their assets in stocks that are exposed to a particular sector or industry. These funds can be actively or passively managed. Depending on their mandate, they can be focused on small, mid, or large-cap stocks. Likewise, a fund may solely invest in the U.S., or have the ability to own stocks in other countries. They can be attractive for investors who believe a particular sector or industry is set to outperform the broader markets as concentrated exposure to a given sector can pay off if the sector performs well. These funds may be good options for investors who want to own stocks in a sector but don’t have the time or expertise to do the necessary research themselves. Active funds can be particularly attractive here as they are managed by experienced investment professionals, who can generate market-beating returns. As a result, these funds tend to be purchased by more aggressive investors who are willing to take on more risk in search of higher returns. More conservative investors usually prefer to own funds and ETFs that own stocks across multiple sectors. This kind of diversification results in less risk and lower volatility, on average. Last Updated: 12/08/2023 View more View less

Sector-focused mutual funds and ETFs invest the majority of their assets in stocks that are exposed to a particular sector or industry. These funds can be actively or passively managed. Depending on their... Sector-focused mutual funds and ETFs invest the majority of their assets in stocks that are exposed to a particular sector or industry. These funds can be actively or passively managed. Depending on their mandate, they can be focused on small, mid, or large-cap stocks. Likewise, a fund may solely invest in the U.S., or have the ability to own stocks in other countries. They can be attractive for investors who believe a particular sector or industry is set to outperform the broader markets as concentrated exposure to a given sector can pay off if the sector performs well. These funds may be good options for investors who want to own stocks in a sector but don’t have the time or expertise to do the necessary research themselves. Active funds can be particularly attractive here as they are managed by experienced investment professionals, who can generate market-beating returns. As a result, these funds tend to be purchased by more aggressive investors who are willing to take on more risk in search of higher returns. More conservative investors usually prefer to own funds and ETFs that own stocks across multiple sectors. This kind of diversification results in less risk and lower volatility, on average. Last Updated: 12/08/2023 View more View less