I'll take 3 funds in the same sector, please.

catch22

How many special sectors would you prefer? That is a separate question, versus spreading the management risk among perhaps 3 funds or more that are targeted towards a related area.
Now, I suspect this wouldn't work in all investment areas. SP-500 oriented funds may not apply for such a consideration or challenge; as diversification would be limited.
Healthcare related is such a sector area that could perhaps support 3 holdings. Fidelity offers an easy view of this area:
---FBIOX, aging biotech companies in this space and a very hot fund last year; and a hot start this year, too. Likely not a medical area that will disappear anytime soon and perhaps finding more mergers in this area and also consolidations of small non-public companies into the existing large players.
---FSPHX, Fido's early entry (1981) into this select sector, and a fund we have had monies in a past life. Not a yield play (.3%), but the most broad based Fido health related fund which includes med. services, device makers, pharma and biotech, among others.
---FPHAX, the most direct play in the pharma area, 38% being foreign companies. A small yielding fund at 1.3%. Outlook in this area also towards mergers and buyouts.

These last two are part of available choices; but of less consideration for this house.

---FSHCX, health providers-hospitals, HMO's, service companies and some insurance companies.
---FSMEX, medical equipment/device makers. This area may have continued negative impact from provisions in the "healthcare law".

So, buy fund(s)s in a related investment area to spread the holdings and management decisions risk, yes?

Or don't you think this method is of any value?

We already use this method with some current fund holdings.

Your thoughts are appreciated.

Regards,
Catch

mns

Personally, I use multiple managers in my core allocation holdings like international or mid caps. I have stayed away from that approach for sector plays mainly because it would result in too many funds to follow. My sector funds each are not a large percent of the portfolio so the effort required doesn't seem worth it for me.

hank

Good question

Ted

Catch22: Now your catching on ! You should own a health care fund, you only need one. I have owned PRHSX for over ten years with an annual return north of 14%
Regards,
Ted
M* Snapshot PRHSX:http://performance.morningstar.com/fund/performance-return.action?t=PRHSX&region=USA&culture=en-US

catch22

Hi Ted,
PRHSX has done very well.
And we have been "catched on" before, too. We owned FSPHX for a number of years prior to 2007 and was one of our early equity holdings in the mid-80's. Looking around for some more add-ons in the coming months; if the equity gods are willing, eh?
Thanks,
Catch

Old_Joe

Reply to @Ted: What's the point of suggesting funds that are closed to new investors?

Ted

Dear Old Joe: Since when is PRHSX closed ?
Regards,
Ted

MikeM

I personally don't think multiple funds are needed, exspecially for sector funds. You might as well buy a sector index fund. I see multiple funds as a security blanket myself. But given your bond portfolio, I'm thinkiing you wouldn't agree Just my 2 pennies.

Ted

MikeM: There is always hope for Catch to embrace equities. Hopefully he will rework his asset allocation and bring it into the twenty-first century.
Regards,
Ted

Sven

Reply to @Old_Joe: PRHSX is still open to new investors, while it may be closed through other fund supermarkets. Otherwise, I am with Ted recommending this excellent fund.