Course 405: Sector-Fund Investing
Using Sector Funds to Diversify
In this course
1 Introduction
2 The Many Flavors of Sector-Fund Investing
3 Do You Need a Sector Fund?
4 Using Sector Funds to Diversify
5 Speculating with Sector Funds
6 A Few More Questions

This is the bringing-coals-to-Newcastle rule: If a sector is already well represented in your portfolio, why buy more of it? If you're going to make use of a sector fund, it should add something your portfolio lacks, or it should increase your exposure to a sector that is underrepresented in your portfolio.

To determine whether you should buy more funds in a particular sector, you need to know and monitor your portfolio's sector weightings. Vanguard Total Stock Market, for example, owns only 3.18% in utilities as of March 31. More conservative investors who like the dividends that utilities stocks often pay out might want to right bump up their exposure with a utilities sector fund.

Next: Speculating with Sector Funds >>

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