Sectoral funds continue to catch investor fancy

NFO launches still surging; experts advise caution

- ANANYA GROVER

EVEN AS THE equity markets are facing continued pressure due to elevated valuations and trade uncertainties, investors continue to subscribe to thematic stories sold by mutual fund houses.

Data from Value Research show that 43% of equity schemes, both active and passive, launched so far in 2025 are either sectoral or thematic. In 2024, they had made nearly 58.7% of the total equity NFOs.

Nehal Meshram, senior analyst, Morningstar Investment Research India, said fund houses are launching these funds that are currently in the spotlight and people are likely to invest. "The timing works well for fund companies to grow their businesses and give more options to investors. But, for investors, it is better to be cautious."