Definition
Sector ETFs provide targeted exposure to individual sectors of the economy. They are used for tactical allocation, expressing sector views, or filling portfolio gaps. The 11 GICS sectors each have dedicated ETFs: Technology, Healthcare, Financials, Consumer Discretionary, Consumer Staples, Energy, Industrials, Materials, Real Estate, Utilities, and Communication Services.
lightbulb Example
An investor bullish on healthcare innovation buys a healthcare sector ETF. The fund holds 60+ healthcare stocks including pharma, biotech, medical devices, and managed care. At 0.10% expense ratio, it provides diversified sector exposure at minimal cost.
verified_user Key Points
- Focused exposure to single industry sector
- 11 GICS sectors cover the entire economy
- Used for tactical sector rotation strategies
- Lower single-stock risk than individual stocks