18 March 2016

Sector ETF's better than Market Index

While no advocate of market timing for the average investor I think it is preferable to keep an eye on overvalued or undervalued market sectors and allocate new money based on constant sector weightings. Index ETF's are a great - and cheap - instrument to get exposure to the Equity Market but this approach avoids money being allocated to expensive and possibly overpriced market sectors. It is perfectly possible to create a near-perfect replication of the overall market by carefully selecting sector ETF's.