A narrower focus brings higher risk
Sector and specialty mutual funds give you access to a very small part of the overall market, like health care, energy, or telecommunications.
Though many of these narrowly focused funds have the potential to grow, you should be equally prepared to experience wide swings in the value of your investmentsincluding potentially large losses.
Get access to specific sectors without the additional risk
If you're not comfortable with the increased risk and volatility that sector and specialty funds present, consider Vanguard Total Stock Market Index Fund for broad coverage of the major industries in one fully diversified fund.
For similar exposure to non-U.S. stocks, consider Vanguard Total International Stock Index Fund.
Choose a specific sector or specialty fund
If your current portfolio is broadly diversified, you may already have the exposure to the sector you're interested in. Only consider increasing your exposure to narrowly focused funds if you're comfortable with—and can afford—the added risk.