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Smoking Out Closet Sector Funds

Handle these focused offerings just like a specialty fund.

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Beware of stealth sector funds.

Plenty of mutual funds use their names and prospectuses to tell you up-front they target one particular precinct of the market and ignore the rest. The monikers of sector funds such as Fidelity Select Computers (FDCPX) and Vanguard Health Care (VGHCX) leave few doubts as to the nature of their investment strategies.

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Dan Culloton has a position in the following securities mentioned above: VGHCX. Find out about Morningstar’s editorial policies.