Examples Of Sector Mutual Funds
When it comes to examples of sector mutual funds, basically these are funds that invest in the stocks of particular industry, or it could be stocks of different sectors of industries. Examples of sector mutual funds can be stocks of technology companies and in this the stocks can belong to a company that manufactures semiconductors. |
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Sometimes, sector mutual funds are also known as specialty mutual funds. However, a specialty mutual fund is not always restricted to stocks. An example of this is commodity fund which invests not just in stocks, but also in securities.
Usually when it comes to sector mutual funds, they are broken down into 6 to 12 sectors, based on where the mutual fund is listed. These will cover the most popular sectors, and sometimes even minor sectors are covered. This said, there are many different sectors and it is always possible to list industries based on how a mutual fund categorizes itself.
The reason that people opt for sector mutual funds is to diversify their portfolios and also overweight their portfolios based on a particular industry or even underweight their portfolio by having a combination of mutual funds from different sectors.
Some examples of sector mutual funds include real estate, biotechnology, alternative energy, green technology, health care, financial services, natural resources, precious metals, telecommunications and utilities. Before going for a sector mutual fund to overweight your investment portfolio, make sure you first figure out how the investment will affect the efficiency of your portfolio, and only then you should invest. Also, find out what the management fees are as most sector mutual funds tend to have high fees.
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