A report from Barclays Global Investors, the parent company of iShares, has highlighted expanding investor interest in sector exchange-traded funds.

According to the report, 2009 net new flows into sector ETFs in Europe already total more than USD2.5bn.

Year-to-date, basic resources has been the most popular sector with USD410m in net new assets, followed by banks with USD350m.

Sector ETFs aim to provide cost-efficient market participation for investors seeking diversified exposure to particular sectors of the economy.

Sector ETFs can also serve as liquid and transparent vehicles for investors looking to express a specific view on the market.

Nick Good, chief executive of iShares Asia Pacific, says: "Sector ETFs offer innovative solutions for investors who want targeted industry exposure without the risks of single stock concentrations. These products allow investors to pursue sector strategies while realizing the unique benefits of ETF investing including liquidity, transparency, cost-effectiveness, and trading flexibility. At iShares, we believe that all investors ought to have awareness for sector investing strategies as well as the unique advantageous offered by sector ETFs."