Mutual Funds: Sector Funds

Mark Twain, always one to upend cliches and conventional wisdom, offered this advice: "Put all your eggs in one basket, and watch that basket." That could be an ad campaign for sector funds.

If you want to place a bet on genomics stocks, B2B stocks, wireless stocks or whatever the white-hot sector is this week, sector funds are one of the easiest ways to do so.

Sector mutual funds focus their stock investments on one industry or segment of the economy, such as utilities companies or technology companies. In the past few years -- as one sector raced ahead of the pack only to be quickly passed by another in "Indian Runner" fashion -- there has been an explosion of sector funds to chase the hot money. Mutual fund companies have scrambled to offer investors opportunities to make targeted investments in just about any sector of the economy. ...