Invest if you anticipate turnaround in beaten-down sector

Mutual fund houses continue towiden their productrange by launching schemes based on narrow sectoral themes, typically through exchange-traded funds (ETFs).

- SARBAJEET K SEN

The latest is Kotak Nifty Chemical ETF, whose new fund offer has opened for subscription.

“By tracking the Nifty Chemical Index, the ETF provides exposure to a basket of leading chemical companies, mitigating single-stock risks, and capturing the sector’s broad-based growth potential,” says Devender Singhal, fund manager, Kotak Mutual Fund. Several other narrow-mandate ETFs track sectors such as real estate, auto, capital markets, and railway public-sector undertakings (PSUs).

“Funds with narrow sectoral mandates aim to capture cyclical tailwinds and turnaround opportunities while focusingon a relatively limited universe of listed companies operating within a specific sector,” says Nirav R Karkera, head of research, Fisdom.

Potential for outsized gains