Sector Fund Definition
Sector Fund means a mutual exchange-traded or closed-end stock fund that invests in businesses of a particular industry or sector of the economy. These funds may be riskier and more volatile because they are less diversified. They increase in price when there is a substantially increased demand for the product of the companies in which the funds invest. In case there is a downturn in the specific sector, the fund suffers losses. Common sector funds usually include financial services funds, gold and precious metals funds, health care funds, and real estate funds, but sector funds are available in almost every industry.