They hold a limited number of securities
in a single sector of the economy, like medical devices or wind power, so they're less diversified than some others.
Stock investors can easily become
overweight in a single sector, or they may accept more volatility than is appropriate for their risk tolerance.
Since sector - and commodity - specific funds are not diversified and focus their investments
entirely in a single sector, commodity, or basket of commodities, the funds will involve a greater degree of risk than an investment in other diversified fund types.
As a form of risk control, the portfolio construction process is designed to penalize high volatility in stocks and avoid excessive
concentration in single sectors of the market.
When we invest in sector funds in NoLoad FundX, we opt to take small positions in funds from several highly ranked sectors rather than concentrating our
exposure in a single sector.
Players will be given the role as Corps Reserve members to help explain why so many lanterns are running
around in a single sector.
On the other hand, Australia, the world's 15th - largest emitter, saw the largest emissions
decrease in a single sector, with its agricultural emissions dropping by 65 MtCO2e, or a reduction of 34.6 percent since 2012.
As per Patrick Moorhead, principal analyst at Moor Insights and Strategy, the chip maker is diversifying because it does not want to invest all of its
efforts in a single sector.
For example, if an ETF
invests in a single sector or subsector, it may be difficult to execute a trade when circumstances are affecting that market.
Today,
in every single sector, the same theme dominates: change.
There are SRI funds that track indexes and funds that are actively managed, and there are funds that invest
in a single sector or industry and those that are more broadly diversified.