Author Topic: Sector ETFs  (Read 1168 times)

AlienRobotAnthropologist

  • 5 O'Clock Shadow
  • *
  • Posts: 46
Sector ETFs
« on: October 13, 2016, 11:29:45 PM »
I know MMM advocates ETFs tracking total market indexes. But is there merit to investing in sector ETFs like the Vanguard Consumer Staples fund, VDC or the iShares US Medical Devices ETF, IHI? It seems like some funds like these do better than the S&P 500 and Vanguard VTI types funds.

NoStacheOhio

  • Handlebar Stache
  • *****
  • Posts: 2143
  • Location: Cleveland
Re: Sector ETFs
« Reply #1 on: October 14, 2016, 09:38:00 AM »
It's a slightly less dangerous form of stock-picking. If you're confident you know more than the market, then invest away. ;-)

Proud Foot

  • Handlebar Stache
  • *****
  • Posts: 1042
Re: Sector ETFs
« Reply #2 on: October 20, 2016, 09:37:54 AM »
The total marked indexes are the best as far as a single investment.  There is some merit to adding sector specific ETF's to your portfolio but it all depends on what you are trying to accomplish. 

Adding VDC to your portfolio would have decreased the volatility while helping to boost the returns of your portfolio.  Similarly adding IHI has helped to boost the returns of your portfolio and also decreased the volatility.

Obviously before adding one of these to your portfolio you need to determine what your goal is for adding them and then research the sectors. Why has that sector had the past performance it has and how long do you expect that performance to continue, if at all.