Sectoral mutual funds have yielded great returns to investors. If you are also thinking of investing in sectoral mutual funds, here are some funds that have performed well in the last 5 years. But you should always remember that the past performance of any fund doesn’t guarantee future returns.
What is sectoral fund?
Sectoral funds are equity mutual funds that focus on businesses operating within a specific industry, like technology, healthcare, energy, or financial services or any other sectors. According to rules, sectoral funds are required to invest at least 80% of the funds in stocks from that sector, offering potential returns when the sector performs well. However, this investment approach comes with higher risk due to sector concentration.
Currently, there are over 180 sectoral mutual fund schemes available, in which over Rs 13,000 crore has been invested in September 2024.
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Total investments in sectoral mutual funds:
Total assets under management (AUM) of these schemes stand at Rs 4.67 lakh crore, which is the highest among all categories of equity mutual funds, including flexi cap, ELSS, large cap, mid cap and small cap funds. In this story, the focus is on mutual fund schemes that are well-performing sectoral/thematic mutual funds and have delivered CAGR returns of over 25% over the last 5 years as of October 18, 2024.
It is worth noting that most of these top-performing schemes belong to IT, infrastructure, healthcare, energy and manufacturing sectors.
Sectoral/Thematic Mutual Funds and Average Returns (%)
DSP Healthcare Fund
5-year return: 33%
AUM: Rs 3094.08 crore
Expense ratio: 1.93%
Bandhan Infrastructure Fund
5-year return: 31.12%
AUM: Rs 1,905.92 crore
Expense ratio: 0.81%
Bank of India Manufacturing & Infrastructure Fund
5-year return: 31.08%
AUM: Rs 528.69 crore
Expense ratio: 0.81%
Canara Robeco Infrastructure Fund
5-year return: 30.22%
AUM: Rs 883.22 crore
Expense ratio: 0.99%
Franklin Build India Fund
5-year return: 29.47%
AUM: Rs 2908.45 crore
Expense ratio: 0.91%
Aditya Birla Sun Life Digital India Fund
5-year return: 28.52%
AUM: Rs 5260.85 crore
Expense ratio: 1.86%
HDFC Infrastructure Fund
5-year return: 26.06%
AUM: Rs 2607.13 crore
Expense ratio: 1.1%
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