What is a sector ETF?

A sector ETF focuses on one slice of the stock market, such as technology, healthcare, energy, or financials. It's a way to express a view on an industry group without picking individual stocks.

Because sector ETFs are narrower than broad market ETFs, they can be more volatile and more sensitive to sector-specific news, regulation, or economic cycles.

If you use sector ETFs, watch concentration and overlap. Many broad market funds already have large weights in certain sectors (like tech), so adding a sector ETF can unintentionally create a big tilt.