Sector ETF guide
In the previous article “Sectors and Industries” we have shown which industries, industry groups and sectors exist in the market. Now lets investigate how and when to invest in them, prominent examples and which ETFs can be used to benefit from the overall sector performance. We selected ETFs per sector based on their total expense ratio (TER).
What is the Total Expense Ratio?
By encapsulating all operational costs of a mutual fund or ETF, the TER reveals a comprehensive view of expenses impacting investment returns. However, the TER should not be the only selection criterion: You also needs to evaluate past and future performance depending on your strategy (portfolio management) and your investment horizon.
Sector ETFs
See our article on Sectors and Industries HERE
Communication Services
Some of the best-known companies:
- Disney (DIS)
- Meta Platforms (META)
- Alphabet Inc. (GOOG, GOOGL)
- Netflix (NFLX)
- Verizon (VZ)
The industry average ETF expense ratio is 0.33%.
| ETF | Total Expense Ratio |
| Vanguard Communication Services ETF (VOX) | 0.05% |
| Fidelity MSCI Communication Services Index ETF (FCOM) | 0.08% |
| Communication Services Select Sector SPDR Fund (XLC) | 0.09% |
Consumer discretionary (or cyclical)
Some of the best-known companies:
- Amazon (AMZN)
- Ford Motor Company (F)
- Tesla (TSLA)
- Home Depot (HD)
- McDonald’s Corp (MCD)
The industry average ETF expense ratio is 0.59%.
| ETF | Total Expense Ratio |
| Vanguard Consumer Discretionary ETF (VCR) | 0.10% |
| iShares S&P 500 Consumer Discretionary Sector UCITS ETF (QDVK) | 0.15% |
| SPDR S&P U.S. Consumer Discretionary Select Sector (ZPDD) | 0.15% |
Consumer staples (or defensive)
Some of the best-known companies:
- Coca-Cola (KO)
- Procter & Gamble (PG)
- Walmart (WMT)
- PepsiCo (PEP)
- Philip Morris (PM)
The industry average ETF expense ratio is 0.41%.
| ETF | Total Expense Ratio |
| iShares MSCI World Consumer Staples Sector ESG UCITS ETF (WCSS) | 0.18% |
| SPDR MSCI World Consumer Staples UCITS ETF (WCOS) | 0.30% |
Energy
Some of the best-known companies:
- Chevron (CVX)
- ExxonMobil (XOM)
- BP PLC (BP)
- Shell PLC (SHEL)
- Occidential Petroleum (OXY)
The industry average ETF expense ratio is 0.69%.
| ETF | Total Expense Ratio |
| Vanguard Energy ETF (VDE) | 0.05% |
| Fidelity MSCI Energy Index ETF (FENY) | 0.08% |
| iShares S&P 500 Energy Sector UCITS ETF (QDVF) | 0.15% |
Financials
- Berkshire Hathaway Inc (BRK.B)
- Visa (V)
- JPMorgan Chase & Co
- Charles Schwab Corp (SCHW)
- The Goldman Sachs Group Inc (GS)
The industry average ETF expense ratio is 1.10%.
| ETF | Total Expense Ratio |
| Gabelli Financial Services Opportunities ETF (GABF) | 0.04% |
| Financial Select Sector SPDR Fund (XLF) | 0.09% |
| Vanguard Financials ETF (VFH) | 0.10% |
Healthcare
- Eli Lilly (LLY)
- Novo Nordisk (NVO)
- Johnson & Johnson (JNJ)
- Thermo Fisher Scientific Inc (TMO)
- Intuitive Surgical Inc (ISRG)
The industry average ETF expense ratio is 0.61%.
| ETF | Total Expense Ratio |
| Fidelity MSCI Health Care Index ETF (FHLC) | 0.08% |
| Health Care Select Sector SPDR Fund (XLV) | 0.09% |
| Vanguard Healthcare ETF (VHT) | 0.10% |
Industrials
- Boeing Co (BA)
- Caterpillar Inc (CAT)
- Waste Management (WM)
- Deere & Co (DE)
- Union Pacific Corp (UNP)
| ETF | Total Expense Ratio |
| Fidelity MSCI Industrial Index ETF (FIDU) | 0.08% |
| Industrial Select Sector SPDR Fund (XLI) | 0.09% |
| Vanguard Industrials ETF (VIS) | 0.10% |
Information technology
- Microsoft Corp (MSFT)
- SAP SE (SAP)
- Adobe Inc (ADBE)
- Qualcomm Inc (QCOM)
- Uber Technologies (UBER)
| ETF | Total Expense Ratio |
| Fidelity MSCI Information Technology Index ETF (FTEC) | 0.08% |
| Technology Select Sector SPDR Fund (XLK) | 0.09% |
| Vanguard Information Technology ETF (VGT) | 0.10% |
Materials
- Linde PLC (LIN)
- Rio Tinto Ltd (RIO)
- Glencore PLC (GLNCY)
- BASF SE (BASFY)
- Newmont Corp (NEM)
| ETF | Total Expense Ratio |
| Fidelity MSCI Materials Index ETF (FMAT) | 0.08% |
| iShares Global Materials ETF (MXI) | 0.41% |
| VanEck Gold Miners ETF (GDX) | 0.51% |
Real estate
- American Tower Corp (AMT)
- Simon Property Group Inc (SPG)
- Crown Castle (CCI)
- Ventas Inc (VTR)
- Prologis Inc (PLD)
The industry average ETF expense ratio is 0.50%.
| ETF | Total Expense Ratio |
| Fidelity MSCI Real Estate Index ETF (FREL) | 0.08% |
| Real Estate Select Sector SPDR Fund (XLRE) | 0.09% |
| Vanguard Real Estate Index Fund (VNQ) | 0.12% |
Utilities
- NextEra Energy Inc (NEE)
- Duke Energy Corp (DUK)
- E.ON SE (EONGY)
- Sempra (SRE)
- American Electric Power Co Inc (AEP)
The industry average ETF expense ratio is 0.51%.
| ETF | Total Expense Ratio |
| Fidelity MSCI Utilities Index ETF (FUTY) | 0.08% |
| Utilities Select Sector SPDR Fund (XLU) | 0.09% |
| Global X US Infrastructure Development ETF (PAVE) | 0.47% |
