The iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB) is an example, laser-focused sector fund. Other sector ETFs that could be viewed as advanced compared to traditional funds include the Market Vectors Oil Service ETF (NYSEArca: OIH) and the PowerShares Dynamic Media Portfolio (NYSEArca: PBS).
OIH and PBS are more focused alternatives to ETFs such as the Energy Select Sector SPDR (NYSEArca: XLE) and the Vanguard Consumer Discretionary ETF (NYSEArca: VCR). While not ultra-risky, ETFs like OIH and PBS are arguably best-suited for investors with strong sector views and the time to research and gather data to support that view, an exercise that could helps spot some of the risk involved with more focused industry funds.
Health Care Select Sector SPDR
ETF Trends editorial team contributed to this post.