Types of Sector Mutual Funds

1. Technology Funds: These mutual funds mostly invest in electronics and information technology firms.

2. Financial Funds: It enables investors to invest in the stocks of financial companies. This includes banks, insurance businesses, financial firms, and accountancy companies, etc

3. Natural Resources Funds: These specialize in energy, forestry, oil and natural gas, and timber-related businesses. It is suitable for long-term growth investors.

4. Precious Metal Funds: These sector funds expose investors to gains in precious metals such as gold, silver, platinum, palladium, and so on. 

5. Real Estate: It enables small investors to engage in the real estate industry and profit from both income and growth.

6. Communication Funds: These generally invest in the telecommunications and internet-related industries.

7. Utility Funds: These mutual funds aim to deliver consistent dividends by investing in the utilities sector.

8. Healthcare Funds: These funds make investments in pharmaceutical businesses, for-profit healthcare facilities, lab chains, and biotechnology companies. These also invest in firms that are working on industrial breakthroughs and advancements.

9. FMCG Funds: These sector funds invest in firms involved in the fast-moving consumer goods (FMCG) market.

Sector Mutual Funds | Meaning, Types and Factors

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What are Sector Mutual Funds?

Sector mutual funds are equity investment plans that focus on a specific economic sector. Sector mutual funds are also known as sectoral funds, which can invest in stocks of firms with different market capitalisations and security classes. These funds enable investors to invest in the best-performing stocks of a certain sector. Utilities, energy, and infrastructure are examples of such sectors....

Types of Sector Mutual Funds

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Factors to Consider Before Investing in Sector Mutual Funds

1. Technology Funds: These mutual funds mostly invest in electronics and information technology firms....

Why Should You Invest in Sector Mutual Funds?

1. Exposure Limit: Before investing in sector funds, investors should have a well-diversified portfolio of regular funds. Although you will be placing all of your eggs in one basket, you should have a well-balanced portfolio and limit your sector exposure to 5-10% of your portfolio value....