sector fund

Definition

A mutual fund which invests entirely or predominantly in a single sector. Sector funds tend to be riskier and more volatile than the broad market because they are less diversified, although the risk level depends on the specific sector. Some investors choose sector funds when they believe that a specific sector will outperform the overall market, while others choose sector funds to hedge against other holdings in a portfolio. Some common sector funds include financial services funds, gold and precious metals funds, health care funds, and real estate funds, but sector funds exist for just about every sector.

Use sector fund in a sentence

You should try and make sure that you know how to best use the sector fund to get the biggest returns.

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Sector Funds are appropriate investment tools for investors believing that a particular group of stocks will perform better than market indices.

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A fund which invests within a single sector (e.g. technology, industrials, healthcare, financials), instead of diversifying across the broader market, is called a sector fund.

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sector ETF crossover fund