Sector-specific mutual funds are investment schemes directed at specific themes of the economy, for example, utilities, healthcare, and energy. They are known for their high rewards. However, they also come with certain risks that must be well noted before you invest in them.
The risk factor in sector-specific mutual funds
Sector-specific mutual funds are considered to be significantly riskier as these funds deal with a single sector, so the risk gets concentrated to a high level. The performance of these funds in the market depends on the performance of the companies or the sector in general. Since the exposure of the funds is not so broad, they carry with them a certain kind of risk. These funds are generally suited for those who are willing to take some risk with their investment.
Types of sector-specific mutual funds
Sector funds on Finserv MARKETS vary in investment objective and market capitalisation and do not fall under the categories of mid-cap growth or large-cap values. Here are the following eight classifications of sector-specific mutual funds.
Natural Resources Funds: These funds deal with sources of energy such as petroleum, oil, and gas, and are suitable to be called the best mutual funds investing for the long term.
Utility funds: Handled by the Association of Mutual Funds in India (AMFI), these stocks deal with shares of utility businesses and provide you with regular dividends — a sort of stable income for. They have a growth factor with them too.
Financial Funds: These stocks deal with investments in the commercial industry, and will have holdings of accounting firms, banking business, insurance firm, mortgage companies, and investment firm.
Real Estate Funds: These funds come as a favourite for small investors who want to benefit from the real estate market without actually having to purchase a property.
Healthcare funds: These funds deal with investments in the pharmaceutical industry, focusing on biotechnology and companies that invest in research and development.
Technology funds: These funds are invested in the technology sector, in companies that are focused on information technology that is used to applications throughout industries.
Refine Metals Funds: These stocks are concerned with metals such as nickel, copper, coal, and silver, and the industries that mine and refine these minerals on a production level.
Communications Funds: These funds are related to the communications sectors and internet-related companies.
Best performing sectors
Some of the best mutual funds on Finserv MARKETS deal with:
Technology: The technology industry is estimated to be growing at 25% per year, and in the coming years, it is said to provide 40-80% profit, from the current 10-20% profit.
Healthcare: With several new announcements coming in the healthcare sector, including several plans set out by the government, investors can invest capital growth in this sector.
Basic Utility: This sector is regarded as profitable and has zero leverage — quite preferred by investors. These funds provide investors with the ability to access multiple schemes of the funds through a single payment.
Where to buy mutual funds?
If you are wondering how to invest in a mutual fund, and how to gain access to the best mutual funds, then you must check out the low risks and high premiums available on Finserv MARKETS. You can invest with transparency and interactivity, and receive regular updates on the performance and value of your investments. You also get the option to liquify your mutual fund any time — unless there are specific lock-in periods attached to the plan.
When you invest in mutual funds, you also get covered under the guidelines of SEBI that help you with protecting your interests so that you can receive high returns that help build wealth over the long haul.
If you are looking to invest in mutual funds with low transaction costs, then mutual funds on FInserv MARKETS could be the place for you. It also offers you the option to divide your funds into smaller parts across different companies so that you make the most out of your investment portfolio. To gain maximum returns with sector-specific funds, it is advisable that you invest in more than one sector. Your funds will be in safe hands with professionals who have expertise in reading and analyzing the investment market and helping you gain higher returns on your mutual fund purchases.
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