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.
Sector funds invest in firms that operate in a certain market segment known as a sector. A sector is made up of one type of firm that sells the same or comparable goods. Some frequent areas include finance and technology. Sector funds enable investors to take particular bets on the growth prospects of a certain industrial area.
Most individuals strive to diversify their financial portfolios by investing in mutual funds. Investing across different asset types, such as equities, debt, real estate, gold, and so on is one method of diversification. Another popular method of diversifying assets is to invest across various sectors of the economy. Mutual funds allow people to invest in specific sectors of the economy.
Table of Content
- Types of Sector Mutual Funds
- Factors to Consider Before Investing in Sector Mutual Funds
- Why Should You Invest in Sector Mutual Funds?