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22 Best Sector Funds to Buy to Juice Your Portfolio

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Sector funds can be a good choice for investors of several stripes. They can help aggressive investors who want to maximize their exposure to a part of the economy they expect will outperform. Sector funds also can be used to position portfolios defensively during market downturns.

When you invest in a sector via a mutual fund, exchange-traded fund or closed-end fund, you can capture profits from a particular market theme or economic-cycle stage while avoiding the risk associated with holding too few stocks. You also avoid the high transaction costs that would be required to build a basket of similarly-themed securities.

For instance: Investors who believe health care costs will rise in sync with America’s aging population may do better betting on a broad health care sector fund rather than taking a risk on a couple pharmaceutical companies and a health care provider. During periods of rising interest rates, consumer discretionary funds and financial ETFs often perform well due to increased business borrowing and consumer-related spending. Defensive sector funds can help investors ride out economic storms thanks to their stability and income potential.

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The stock market is most commonly divided into 11 major sectors, each representing a key segment of the economy. So, here are 22 sector funds – two funds from each sector to consider. Each fund addresses a major market theme, has a long track record and maintains a broad, well-diversified portfolio.

SEE ALSO: The 27 Best Mutual Funds in 401(k) Retirement Plans

Data is as of Nov. 26, 2018. Yields represent the trailing 12-month yield, which is a standard measure for equity funds.

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