Sector ETFs dissect the market according to their economy activity. These products are popular with investors looking for targeted exposure in addition to their core equity exposure, as well as those looking to take advantage of long-term trends in the economy.
Furthermore, investors can benefit from the low correlations between each sector, which allows for easier risk management. From an active management perspective, they can also implement sector rotation strategies.
With 460 ETFs traded in the U.S. markets, Sectors ETFs gather total assets under management of $453.50B. The average expense ratio is 0.63%. Sectors ETFs can be found in the following asset classes:
The largest Sectors ETF is the Vanguard Real Estate ETF VNQ with $29.72B in assets. In the last trailing year, the best performing Sectors ETF was the RETL at 61.36%. The most-recent ETF launched in the Sectors space was the Defiance Quantum ETF QTUM in 09/05/18.