Definition
Sector ETFs provide targeted exposure to specific industries like technology, healthcare, financials, or energy. They allow investors to overweight sectors they believe will outperform or underweight those expected to lag. Popular for tactical allocation, sector rotation strategies, and expressing economic views.
Example
XLK (Technology Select Sector SPDR) holds major tech stocks. Buying it overweights your portfolio to technology.
FAQ
What is Sector ETF?
An ETF that focuses on a specific industry sector.
Why is Sector ETF important?
Sector ETF helps investors evaluate ETFs and make more informed decisions.