Top Performing Sectoral Funds in 5 Years

The table below shows a list Of the Best Sectoral funds Based on AUM, NAV and minimum SIP.

Introduction to Top Performing Sectoral Funds in 5 Years

Nippon India Pharma Fund

Nippon India Pharma Fund Direct-Growth is a Sectoral-Pharma mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Nippon India Pharma Fund as a specific sector or industry-focused fund, manages assets valued at ₹8139.57 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 30.69%. This fund has an exit load of 1% and an expense ratio of 0.9%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  97.41%, No Debt and Other at 2.59%.

Nippon India Power & Infra Fund

Nippon India Power & Infra Fund Direct-Growth is a Sectoral-Infrastructure mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Nippon India Power & Infra Fund as a specific sector or industry-focused fund, manages assets valued at ₹7537.49 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 32.76%. This fund has an exit load of 1% and an expense ratio of 0.98%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  98.63%, No Debt and Other at 1.37%.

ICICI Pru Infrastructure Fund

ICICI Prudential Infrastructure Direct-Growth is a Sectoral-Infrastructure mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

ICICI Pru Infrastructure Fund as a specific sector or industry-focused fund, manages assets valued at ₹6142.92 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 33.09%. This fund has an exit load of 1% and an expense ratio of 1.18%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  93.76%, Debt at 1.13% and Other at 5.11%.

DSP India T.I.G.E.R Fund

DSP The Infrastructure Growth and Economic Reforms Regular Fund Direct-Growth is a Sectoral-Infrastructure mutual fund scheme from DSP Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

DSP India T.I.G.E.R Fund as a specific sector or industry-focused fund, manages assets valued at ₹5360.43 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 32.41%. This fund has an exit load of 1% and an expense ratio of 0.91%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  92.42%, No Debt and Other at 7.58%.

SBI Infrastructure Fund

SBI Infrastructure Fund Direct-Growth is a Sectoral-Infrastructure mutual fund scheme from SBI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

SBI Infrastructure Fund as a specific sector or industry-focused fund, manages assets valued at ₹4790.48 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 30.53%. This fund has an exit load of 0.5% and an expense ratio of 1%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  91.85%, No Debt and Other at 8.15%.

ICICI Pru Pharma Healthcare & Diagnostics (P.H.D) Fund

ICICI Prudential Pharma Healthcare and Diagnostics (P.H.D) Fund Direct-Growth is a Sectoral-Pharma mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 6 years and 2 months, having been launched on 25/06/2018.

ICICI Pru Pharma Healthcare & Diagnostics (P.H.D) Fund as a specific sector or industry-focused fund, manages assets valued at ₹4500.25 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 33.29%. This fund has an exit load of 1% and an expense ratio of 1.08%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equityat-  95.64%, No Debt and Other at 4.36%.

Quant Infrastructure Fund

Quant Infrastructure Fund Direct-Growth is a Sectoral-Infrastructure mutual fund scheme from Quant Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Quant Infrastructure Fund as a specific sector or industry-focused fund, manages assets valued at ₹3990.92 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 40.24%. This fund has an exit load of 0.5% and an expense ratio of 0.66%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  81.93%, Debt at 3.49% and Other at 14.58%.

SBI Healthcare Opp Fund

SBI Healthcare Opportunities Fund Direct Plan-Growth is a Sectoral-Pharma mutual fund scheme from SBI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

SBI Healthcare Opp Fund as a specific sector or industry-focused fund, manages assets valued at ₹2979.52 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 31.5%. This fund has an exit load of 0.5% and an expense ratio of 0.9%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  94.24%, No Debt and Other at 3.76%.

DSP Healthcare Fund

DSP Healthcare Fund Direct-Growth is a Sectoral-Pharma mutual fund scheme from DSP Mutual Fund. This fund has been in existence for 5 years and 10 months, having been launched on 12/11/2018.

DSP Healthcare Fund as a specific sector or industry-focused fund, manages assets valued at ₹3934.17 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 33.96%. This fund has an exit load of 0.5% and an expense ratio of 0.58%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  94.37%, No Debt and Other at 5.63%.

Franklin Build India Fund

Franklin Build India Direct Fund-Growth is a Sectoral-Infrastructure mutual fund scheme from Franklin Templeton Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Franklin Build India Fund as a specific sector or industry-focused fund, manages assets valued at ₹2904.32 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 31.06%. This fund has an exit load of 1% and an expense ratio of 0.97%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  95.99%, No Debt and Other at 4.01%.

What Are Sectoral Funds?

Sectoral funds are mutual funds that invest primarily in a specific sector or industry, such as technology, healthcare, or energy. They aim to capitalize on the growth potential of that particular sector by focusing on related companies.

These funds offer higher growth opportunities but come with greater risk due to their concentrated exposure to a single sector. Performance is closely tied to the sector’s market conditions, making them more volatile compared to diversified funds.

Sectoral funds are ideal for experienced investors with a strong understanding of the sector’s dynamics. They are typically used to complement a broader investment portfolio rather than as a core holding.

Features Of Top Performing Sectoral Funds in 5 Years

The main features of top-performing sectoral funds over the last five years include focused investment strategies, high returns in sector-specific growth periods, increased volatility due to sector concentration and a requirement for active monitoring and expertise from investors for effective management.

• Focused Investment Strategy: Top-performing sectoral funds follow a targeted investment approach, concentrating on a single sector like healthcare or technology. This allows them to capitalize on industry-specific growth trends, outperforming broader market funds during favourable economic conditions for that sector.
• Higher Returns in Sector-Specific Growth: These funds have the potential to deliver significantly higher returns during a sector’s growth phase. When a sector experiences rapid expansion, top-performing funds in that space often outperform diversified funds, offering exceptional short-to-medium-term gains.
• Increased Volatility: Sectoral funds are more volatile than diversified funds because they are heavily dependent on the performance of a single sector. Economic downturns or unfavourable regulations impacting that sector can lead to sharp declines in the fund’s value.
• Active Monitoring and Expertise Required: Due to their concentrated nature, sectoral funds demand active monitoring and a strong understanding of the sector’s trends and risks. Investors need to stay informed about industry developments to make timely buy or sell decisions, ensuring optimized returns.

Best Performing Sectoral Funds in 5 Years

The table below shows the Best-performing Sectoral funds Based on the highest to lowest expense ratio.

Top Performing Sectoral Funds in 5 Years In India

The table below shows the Best Sectoral funds Based on the Highest 3Y CAGR.

Top Performing Sectoral Funds in 5 Years List

The table below shows Best Performing Sectoral funds In India Based on Exit Load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Factors To Consider When Investing In Top Performing Sectoral Funds in 5 Years

The main factors to consider when investing in top-performing sectoral funds over the last five years include the sector’s growth potential, the fund’s risk level, market timing and the investor’s knowledge of the sector for informed decision-making.

• Sector Growth Potential: Evaluate the long-term growth prospects of the sector before investing. Sectors like technology or healthcare may offer high potential due to innovation and demand, but cyclical sectors like energy might face periods of stagnation or decline.

• Risk Level: Understand that sectoral funds come with high risk due to their concentrated focus. An underperforming sector can lead to significant losses, so assess your risk tolerance before investing, especially in volatile or cyclical sectors.

• Market Timing: Timing plays a crucial role in sectoral fund investments. Entering during an industry’s growth phase can result in high returns, but investing near the peak can lead to losses when the sector faces a downturn or correction.

• Investor Knowledge: Sectoral fund investments require a solid understanding of the sector’s trends, challenges, and opportunities. Without sufficient knowledge, it can be difficult to make informed decisions about when to invest, hold or exit the fund for optimal returns.

How To Invest In Top Performing Sectoral Funds in 5 Years?

To invest in top-performing sectoral funds, start by researching sectors with strong growth potential. Understand the risks involved, as sectoral funds are concentrated investments. Choose a fund that aligns with your financial goals and risk tolerance for better returns.

You can invest through online brokerage platforms like Alice Blue, which offer easy access to mutual funds and stock investments. Alice Blue provides detailed fund information, allowing you to compare performance and fees, ensuring a well-informed investment decision.

Monitor your investment regularly to stay updated on sector performance and market trends. Be ready to exit or adjust your portfolio if the sector underperforms or new opportunities arise, ensuring continuous portfolio optimization.

Advantages Of Investing In Top Performing Sectoral Funds in 5 Years

The main advantages of investing in top-performing sectoral funds over the last five years include high return potential, portfolio diversification, sector-specific growth opportunities and the ability to capitalize on emerging trends in high-performing industries for enhanced financial gains.

• High Return Potential: Sectoral funds offer the potential for significant returns during periods of sector growth. When a particular industry performs well, these funds often outperform broader market funds, delivering higher returns to investors who capitalize on growth trends.

• Portfolio Diversification: Investing in sectoral funds allows you to diversify your portfolio by gaining exposure to specific industries. This diversification can complement broader investments, spreading risk across various sectors and reducing reliance on the overall market’s performance.

• Sector-Specific Growth: By investing in sectoral funds, you can focus on high-growth sectors like technology or pharmaceuticals. These industries often lead market innovation and expansion, offering investors opportunities to benefit from their accelerated growth and profitability.

• Emerging Trends: Sectoral funds enable investors to capitalize on emerging industry trends, such as renewable energy or healthcare advancements. By targeting fast-growing sectors, investors can benefit from early-stage developments and potentially achieve higher long-term returns as these sectors expand.

Risks Of Investing In Top Performing Sectoral Funds in 5 Years

The main risks of investing in top-performing sectoral funds over the last five years include high volatility, sector-specific downturns, concentration risk and limited diversification. These factors can lead to significant losses if the targeted sector underperforms or faces adverse conditions.

• High Volatility: Sectoral funds are often more volatile than diversified funds because they focus on a single industry. Market fluctuations or economic challenges specific to that sector can lead to large swings in the fund’s value, affecting returns.

• Sector-Specific Downturns: If a sector experiences a downturn due to regulatory changes, economic shifts, or declining demand, sectoral funds can suffer significant losses. Investors must be aware of the sector’s vulnerability to external factors when making investment decisions.

• Concentration Risk: Investing heavily in one sector increases the concentration risk, meaning all your investments are tied to the performance of a single industry. This lack of diversification can magnify losses during sector downturns, affecting the overall portfolio balance.

• Limited Diversification: Sectoral funds offer limited diversification compared to broader mutual funds, as they focus on one specific industry. If the sector underperforms, the fund’s performance will be negatively impacted, reducing the safety net provided by diversified portfolios.

Importance of Sectoral Funds

Sectoral funds are important for investors seeking to capitalize on specific industry growth. They allow targeted exposure to high-potential sectors like technology or healthcare, offering higher returns compared to diversified funds when the sector performs well during favourable market conditions.

These funds also provide portfolio diversification by enabling investors to balance their core holdings with sector-specific investments. This approach allows for tailored strategies based on market trends, helping investors leverage emerging opportunities in rapidly growing industries for potential financial gains.

How Long to Stay Invested in Sectoral Funds?

Staying invested in sectoral funds depends on the sector’s growth cycle and market conditions. Typically, sectoral funds perform well during specific industry booms, so holding for three to five years may yield optimal returns as the sector grows.

However, it’s essential to monitor sector trends regularly. Exit when the sector shows signs of stagnation or decline. Long-term holding beyond growth peaks can lead to reduced gains or losses, making it crucial to adapt your investment strategy accordingly.

Tax Implications of Investing in Sectoral Funds

Investing in sectoral funds can lead to capital gains tax implications. Short-term capital gains, from investments held less than a year, are taxed at a higher rate, while long-term gains, from investments held over a year, benefit from reduced tax rates.

Additionally, dividends received from sectoral funds are subject to tax according to the investor’s income bracket. It’s important to understand these tax implications to manage your investment returns effectively and consider tax-efficient strategies, such as holding investments longer to benefit from lower long-term capital gains rates.

Future of Sectoral Funds

The future of sectoral funds appears promising as they allow investors to target emerging industries like green energy and technology. As sectors evolve and new growth areas emerge, these funds can offer substantial returns for those willing to navigate sector-specific risks.

However, sectoral funds will continue to face high volatility and concentration risks. Their performance will be closely tied to sector trends and economic conditions, requiring investors to stay informed and agile to maximize returns while managing potential downturns effectively.

Top Performing Sectoral Funds in 5 Years FAQs  

Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.