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These 35 sector funds are the cheapest to own for three months.

If you want to experiment with sector rotation, exchange-traded funds are a convenient vehicle. The table below highlights the best short-term deals in that category.

The costs reflect what a $10,000 speculator gives up in buying into a fund, holding it for a fourth of a year, and selling. They reflect bid/ask spreads, expense ratios and the expense offsets from securities lending by the fund.

The liquidity grade is based on a combination of bid/ask spreads and trading volume.

3-month Holding Cost*
Liquidity Score
Ticker Exchange-traded fund
XRT SPDR S&P Retail $2.94 A
XLY Consumer Discret Sel Sect SPDR 4.02 A+
SCHH Schwab US REIT 4.26 A
VNQ Vanguard Real Estate 4.32 A+
XLE Energy Select Sector SPDR 4.45 A+
XLV Health Care Select Sector SPDR 4.51 A+
IYZ iShares U.S. Telecommunications 4.58 B
XLI Industrial Select Sector SPDR 4.62 A+
XLK Technology Select Sector SPDR 4.71 A+
XLB Materials Select Sector SPDR 5.02 A+
XLU Utilities Select Sector SPDR 5.32 A+
XLP Consumer Staples Select Sector SPDR 5.35 A
XBI SPDR S&P Biotech 5.50 A
FTEC Fidelity MSCI Information Tech 5.81 A
VDC Vanguard Consumer Staples 5.89 A
VCR Vanguard Consumer Discretionary 6.24 B
VFH Vanguard Financials 6.36 A
FNCL Fidelity MSCI Financials 6.41 B
FDIS Fidelity MSCI Consumer Discret 6.47 B
XLRE Real Estate Select Sector SPDR 6.52 A
VDE Vanguard Energy 6.79 A
XLF Financial Select Sector SPDR 6.88 A
VGT Vanguard Information Technology 6.94 A
VPU Vanguard Utilities 7.01 A
VOX Vanguard Communication Services 7.34 B
VAW Vanguard Materials 7.35 A
FUTY Fidelity MSCI Utilities 7.50 B
FHLC Fidelity MSCI Health Care 7.70 B
VHT Vanguard Health Care 7.73 A
FENY Fidelity MSCI Energy 8.03 B
FMAT Fidelity MSCI Materials 8.08 B
FIDU Fidelity MSCI Industrials 8.13 B
VIS Vanguard Industrials 8.66 B
XOP SPDR S&P Oil & Gas Explor & Prodtn 9.21 A
USRT iShares Core US REIT 9.22 B

*Cost of a $10,000 position held for three months. Reflects bid/ask spread, expense ratio and cost offset from securities lending.

Data sources: Morningstar, Bloomberg, fund distributors

For a similar ranking of funds by long-term holding costs, see Best ETFs for Investors: Sector Funds.

For links to short-term rankings of other categories of funds, such as bonds and foreign stocks, see Best ETFs for Trading.

Originally published at Forbes

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