Sector funds

Are mutual funds which invest entirely or predominantly in a single sector. Sector funds will carry more risk or be more volatile than broad market funds because they are less diversified, although the risk level depends on the specific sector. Again, they are generally only suitable for medium to long term investment.

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, health care funds, and real estate funds, but sector funds exist for just about every sector. Gold and precious metals funds, as well as other funds investing in physical commodities, futures and commodity related equities are included in the range.

  • Unit trusts
  • Luxembourg SICAVs
  • Open ended investment companies (OEICs)

...and in different domiciles, such as UK, Dublin, Luxembourg, Channel Islands and others.

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