The stock market is comprised of 11 sectors. Each sector has multiple ETFs. The 11 sectors are:

  • Communications Services
  • Consumer Discretionary
  • Consumer Staples
  • Energy
  • Financials
  • Health Care
  • Industrials
  • Information Technology
  • Materials
  • Real Estate
  • Utilities

Below is an example of how sector ETFs also have different fund fees. For this example, I’ll use the Vanguard Information Technology ETF, VGT, and the Technology Select Sector SPDR ETF, XLK. Both have very low expense ratios, but over time, there will still be a slight difference in returns.

Table 3 compares two information technology sector ETFs, VGT and XLK. The example assumes an initial investment of $20,000 with no additional contributions and an 8% growth rate. After 20 years, you’ll pay $267 more in fees and have $547 less by investing in the SPDR sector ETF instead of the Vanguard Sector ETF. CLICK HERE to see the full table of investment growth for both funds over 20 years.

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