Part 6/10:
Although these options may resonate with investors eager to capitalize on emerging technologies and sustainability trends, they also raise concerns regarding industry overexposure. Investments concentrated heavily in specific sectors can mimic stock-picking strategies and fail to meet the diversification needs of an investor less skilled in identifying potential winners in uncertain markets.
Additionally, higher fees attached to specialized funds, known as the total expense ratio (TER), increase the cost of investing, further complicating the long-term growth potential. A fee difference—such as 0.6% versus 0.22%—can significantly impact compounded returns over time, making it crucial for investors to conduct comprehensive research.