Sector Diversified Equity

Sector diversified mutual funds and ETFs own shares of companies across a... Sector diversified mutual funds and ETFs own shares of companies across a wide range of sectors. These funds can be actively or passively managed, and may, depending on their mandate, own a mix of small, mid, or large capitalization stocks. They may also own shares of both U.S. and international companies. Additionally, they can also own a range of growth and value stocks. Unlike specific sector funds, sector diversified mutual funds are not constrained by what sectors and industries they can invest in. This allows them to offer diversification to investors, which can reduce portfolio volatility. An ability to invest in a range of sectors also allows the portfolio managers to prefer sectors and industries they believe are attractive and reduce exposure to those with bleak prospects. Several types of funds fall under the sector diversified umbrella, including broad-based equity funds, index funds, and ETFs. Sector diversified mutual funds and ETFs are usually appropriate for most investors, especially those with a long-term time horizon. These funds don’t have the same upside potential as sector-specific funds, but they also come with lower risk. Last Updated: 06/04/2026 View more View less

Sector diversified mutual funds and ETFs own shares of companies across a wide range of sectors. These funds can be actively or passively managed, and may, depending on their mandate, own a mix... Sector diversified mutual funds and ETFs own shares of companies across a wide range of sectors. These funds can be actively or passively managed, and may, depending on their mandate, own a mix of small, mid, or large capitalization stocks. They may also own shares of both U.S. and international companies. Additionally, they can also own a range of growth and value stocks. Unlike specific sector funds, sector diversified mutual funds are not constrained by what sectors and industries they can invest in. This allows them to offer diversification to investors, which can reduce portfolio volatility. An ability to invest in a range of sectors also allows the portfolio managers to prefer sectors and industries they believe are attractive and reduce exposure to those with bleak prospects. Several types of funds fall under the sector diversified umbrella, including broad-based equity funds, index funds, and ETFs. Sector diversified mutual funds and ETFs are usually appropriate for most investors, especially those with a long-term time horizon. These funds don’t have the same upside potential as sector-specific funds, but they also come with lower risk. Last Updated: 06/04/2026 View more View less