This episode of Tasty Bites takes a closer look at trading broad market ETFs vs. trading sector ETFs.
With a smaller account, we want to be efficient with our capital. Therefore, trading sector ETFs can be a better option than trading broader market ETFs.
Broader market ETFs, such as SPY, have bigger BPR so they are more capital intensive.
Sector ETFs, on the other hand, have smaller BPR without sacrificing diversification. Therefore, one way to efficiently manage one’s capital in a smaller account without sacrificing diversification is to trade sector ETFs.