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Sectors can provide targeted exposure to specific segments of the economy, providing an opportunity to help investors potentially enhance returns and manage risk.
Viewpoints & White Papers
- 1. “The Business Cycle Approach to Sector Investing,” Fidelity Investments AART, May 2019.
- Past performance is no guarantee of future results.
- Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Because of their narrow focus, sector funds tend to be more volatile than funds that diversify across many sectors and companies. A sector fund may have additional volatility because it can invest a significant portion of assets in securities of a small number of individual issuers. Each sector fund is also subject to the additional risks associated with its particular industry.
- Investing involves risk, including risk of loss. Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk.
- Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.
- ETFs are subject to market fluctuation, the risks of their underlying investments, management fees, and other expenses.
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