CHAPTER 11
Sector Funds
SECTOR STRATEGIES COMBINE core long holdings of equities with short sales of stock or sector indexes, confining their universe to a group of companies or a segment of the economy with similarities either in what is produced or who the market is. Managers combine fundamental financial analysis with industry expertise to identify the best profit opportunities in the sector. Net exposure of sector portfolios may range anywhere from net long to net short depending on market and sector-specific conditions. Managers generally increase net long exposure in bull markets for the sector and decrease net long exposure or may even be net short in bear markets for the sector. Generally, the short exposure is intended to generate an ...

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