Which Sector Fund Should You Bet On?

Despite the volatility coursing through the Indian equity markets, mutual funds have become the saving grace for investors to park their funds. In this article, Vardan Pandhare highlights those sector funds that could prove to be game-changers in time to come

- Vardan Pandhare

Some investors fervently support ‘high-risk, high-return’ ventures in the world of investing. And for such risk-takers, mutual fund houses have an offering in the form of sector funds. According to their investing aim, sector mutual funds invest in certain sectors. Some industries, including banking, pharmaceuticals and infrastructure, have experienced sustained growth and have a promising future. Participants with a high-risk tolerance might invest in sector funds even though these mutual funds have the potential to double or lose your money. In this article, you will learn in depth about sector funds, along with the top sector mutual funds to bet on.

Why Sector Funds? A sector fund is a kind of mutual fund that makes investments in the securities of certain industries, such as infrastructure, FMCG, banking, telecom, FM and Information Technology (IT). In other words, sector funds focus exclusively on a single industry or area for your invested wealth. A pharmaceutical fund, for example, can only invest in the stocks of pharmaceutical companies, while a banking sector fund can invest in banks. The fund manager in charge places money in shares of firms that are performing well on the market. Investing in industries with strong maturation potential in the near future is the main goal of this type of investing.