Sector Fund

A sector fund invests in companies in a specific type of business sector.

Sector funds can invest in a general industry or a specific industry. For instance, technology is a general industry, and internet companies are a specific industry.Because sector funds focus on only one industry, they are usually riskier than general stock funds. That is not to say that sector funds have no function; investors can use sector funds to fill gaps in their portfolios. Moreover, investors may want to back an industry in which they are confident.

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