What is sector investing?

Sector investing involves investing in a particular sector of the economy such as healthcare, technology or energy. How does sector investing differ from traditional investing? Sector investing involves focusing on a particular industry or sector, whereas traditional investing involves investing across a range of industries.

How does sector investing affect investments in a fund?

Sector investing can influence investments in the fund. A fund may target a specific sector such as technology, or seek to diversify among many sectors. Some funds may have restraints on sector investments. This may occur with environmental, social, and governance (ESG) focused funds.

Why is sector investing important?

Sector investing plays an increasingly important role in the strategies that investors use today. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors.