Services Sector ETF

AAA

DEFINITION of 'Services Sector ETF'

Exchange-traded funds (ETFs) that invest in either the consumer services sector or financial services sector of an economy. A consumer services ETF seeks to derive investment results that correspond to an underlying index of companies that provide products and services to consumers. A financial services ETF aims to derive investment results that track an underlying index of financial service providers such as banks and credit-card issuers.

BREAKING DOWN 'Services Sector ETF'

Since consumer spending accounts for a major part of most economies, the investment returns from a consumer services ETF would depend on the prevailing level of consumer sentiment, and hence consumer spending, in an economy. A consumer services ETF would generally include a wide range of companies that provide consumer goods and services, from cable providers and drugstore chains to hotel and retailers (both online and bricks-and-mortar).



The investment returns from a financial services ETF are dependent on the performance of the financial sector, which is also closely tied to the performance of the broad economy. Such an ETF would include banks, trusts companies, asset managers, credit-card issuers and other providers of financial services.

RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Insurance Industry ETF

    A sector-following fund that invests primarily in insurance companies, ...
  3. Actively Managed ETF

    An exchange-traded fund that has a manager or team making decisions ...
  4. Leveraged ETF

    An exchange-traded fund (ETF) that uses financial derivatives ...
  5. Consumer Cyclicals

    A category of stocks that rely heavily on the business cycle ...
  6. Sector ETF

    A class of exchange-traded fund that invests in the stocks and ...
Related Articles
  1. Mutual Funds & ETFs

    Spread Out Risk With Sector-Based ETFs

    These ETFs take the sector rotation strategy from institutional investors and puts it in your hands.
  2. Mutual Funds & ETFs

    An Introduction To Sector ETFs

    Find out how these specialized ETFs can give your portfolio the punch it needs.
  3. Mutual Funds & ETFs

    ETFs: How Did We Live Without Them?

    These funds burst onto the scene in 1993 and have continued to provide new opportunities for investors since.
  4. Mutual Funds & ETFs

    ETF Analysis: iShares US Basic Materials

    Learn about the iShares US Basic Materials exchange-traded fund, which invests in the equities of chemicals, metals and industrial gas companies.
  5. Mutual Funds & ETFs

    ETF Analysis: Ultra Oil & Gas

    Find out more about the ProShares Ultra Oil & Gas exchange-traded fund, the characteristics of the ETF and the suitability and recommendations for the fund.
  6. Mutual Funds & ETFs

    ETF Analysis: PowerShares DB Commodity Tracking

    Find out about the PowerShares DB Commodity Tracking ETF, and explore a detailed analysis of the fund that tracks 14 distinct commodities using futures contracts.
  7. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI US 1000

    Find out about the PowerShares FTSE RAFI U.S. 1000 ETF, and explore detailed analysis of the fund that invests in undervalued stocks.
  8. Mutual Funds & ETFs

    Comparing ETFs Vs. Mutual Funds For Tax Efficiency

    Explore a comparison of mutual funds and exchange-traded funds, or ETFs, and learn what makes ETFs a significantly more tax-efficient investment.
  9. Mutual Funds & ETFs

    ETF Analysis: Vanguard Small-Cap Value

    Find out about the Vanguard Small-Cap Value ETF, and explore detailed analysis of its characteristics, suitability, recommendations and historical statistics.
  10. Mutual Funds & ETFs

    ETF Analysis: Vanguard Intermediate-Term Corp Bd

    Learn about the Vanguard Intermediate-Term Corporate Bond ETF, and explore detailed analysis of the fund's characteristics, risks and historical statistics.
RELATED FAQS
  1. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  2. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  3. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  4. Is there a situation in which wash trading is legal?

    Wash trading, the intentional practice of manipulating a stock's activity level to deceive other investors, is not a legal ... Read Full Answer >>
  5. Are there leveraged ETFs that follow the retail sector?

    There are many exchange-traded funds (ETFs) that track the retail sector or elements of the retail sector, and some of those ... Read Full Answer >>
  6. What are some of the most popular ETFs that track the retail sector?

    Some of the most popular exchange-traded funds (ETFs) that track the retail sector include the iShares S&P Global Consumer ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  2. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  3. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  4. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  5. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  6. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!