Best Sector Mutual Funds

Sector mutual funds are responsible for boosting the expansion of a particular industry by pooling resources from various individuals and investing it. Generally, mutual funds are considered to pose less risk than equity investments, as the capital is spread across various organisations. However, the best sector mutual funds operate a little differently. They mainly target those zones which have a proven track record of high returns, or ones with the highest potential to grow in the future.

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Top 10 Sector Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
DSP Natural Resources and New Energy FundEquityHigh-11.6%5star326
Aditya Birla Sun Life India GenNext FundEquityHigh-2.6%5star1,551
BOI AXA Manufacturing & Infrastructure FundEquityHigh8.3%5star40
UTI Transportation and Logistics FundEquityHigh-1.7%5star1,260
ICICI Prudential Technology FundEquityHigh38.4%5star545
Invesco India Infrastructure FundEquityHigh1.4%5star45
SBI Banking & Financial Services FundEquityHigh-16.4%5star1,525
Nippon India Pharma FundEquityHigh58.5%5star3,653
Tata Banking And Financial Services FundEquityHigh-17.9%4star468
SBI Technology Opportunities FundEquityHigh26.3%4star227
SBI Infrastructure FundEquityHigh-6.5%4star446
UTI MNC FundEquityHigh2.2%4star2,178
Kotak Infrastructure & Economic Reform FundEquityHigh-13.8%4star251
SBI Consumption Opportunities FundEquityHigh-11.6%4star589
Tata India Consumer FundEquityHigh2.0%4star1,162
View All Top 10 Sector Mutual Funds

Features of Sector Mutual Fund

Sector mutual funds aim to take advantage of the market situation by investing in those fields which have the highest potential of growth or are already the fastest expanding sectors of the country.

The best sector funds have a portfolio of companies that operate in the same industry. This boosts the expansion of the respective sector, thereby generating higher profit levels, leading to higher returns on such investments.

Taxability

Two primary types of tax are imposed on mutual funds – the tax on dividends and tax on capital gains.

Tax on dividends is borne by the asset management company managing the Mutual Funds in question. It remains tax-free to the investors who receive this amount.

Capital gains, on the other hand, are subject to nominal rates of taxation as per the Income Tax Act of India. Short term capital gains tax at the rate of 10% is deducted if the holding period of the fund is less than 36 months.

Long term capital gains tax is applicable on funds having a holding period of more than 36 months. Around 15% of the total gain is deductible in such cases.

However, long term capital gains are subjected to adjustment for indexation. This ensures that the value of the capital gains is retained even if there’s a high rate of inflation in the country.

Who Are These Funds Suited For?

These mutual funds are ideal for those who want to generate substantial profits by making calculated investments in those funds which mainly comprise of the leading sectors of a country.

The best sector funds to invest in 2019 mainly comprised of companies operating in the IT, infrastructure, FMCG products, housing finance, etc.

Sector funds go a long way into enhancing the economic growth of a country as well, as heavy capital investments made in a particular sector allow them to operate freely, generating profits. This increases the income of the citizens and thereby their purchasing power, leading to an improved quality of life.

However, these funds are associated with a higher risk, as the performance of a burgeoning sector can falter due to various reasons. Also, performance of a particular industry is heavily dependent on the government policies undertaken. In case of persisting political turmoil in a country, sectors having huge untapped potential and large asset base can underperform as well.

Major Advantages

Sector mutual funds generate a large number of profits, provided the investment was made after careful market analysis. The portfolio manager of such a mutual fund assesses the potential and growth level of companies of a particular sector and creates best sector mutual funds likely to generate high revenues.

If this analysis is done correctly, a mutual fund can exploit this untapped potential and extract huge dividend returns. These funds are ideal for individuals looking for a long term investment strategy which will yield beneficial results.

Since these funds are optimal for a longer investment regime, benefits are not usually visible in the short term.

One disadvantage of the best sector mutual funds is that they have higher volatility than regular equity funds. In the case of faulty or inaccurate predictions of the market condition and growth trend, huge losses will be incurred.

Another point to be noted is that since the resource pool is invested in the same sector, in the case of downfall in that particular segment, the entire mutual fund will be affected. There would be no companies compensating for this loss. This multiplies the damage manifold in case of economic slowdown of a particular sector.

Best sector mutual funds to invest in 2019 depend upon the portfolio spread and the sector in which the highest level of expansion is being undertaken. In India, banking and IT sector are expanding at a fast pace, making it profitable for investors to pool their finances. Best performing mutual funds of 2019 pool their resources in this field.

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

DSP Natural Resources and New Energy Fund Direct Plan Growth

Fund Performance: This fund has given -7.04% annualized returns in the last three years. In the last year, its returns were -11.57%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing -11.57% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹500
AUM326Cr
1Y Returns-11.6%

Aditya Birla Sun Life India GenNext Direct Fund Growth

Fund Performance: This fund has given 4.88% annualized returns in the last three years. In the last year, its returns were -2.62%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing -2.62% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹1,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹1,000
AUM1,551Cr
1Y Returns-2.6%

BOI AXA Manufacturing & Infrastructure Direct Growth

Fund Performance: This fund has given 2.52% annualized returns in the last three years. In the last year, its returns were 8.27%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 8.27% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM40Cr
1Y Returns8.3%

UTI Transportation and Logistics Fund Direct Growth

Fund Performance: This fund has given -7.78% annualized returns in the last three years. In the last year, its returns were -1.73%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing -1.73% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM1,260Cr
1Y Returns-1.7%

ICICI Prudential Technology Direct Plan Growth

Fund Performance: This fund has given 26.79% annualized returns in the last three years. In the last year, its returns were 38.37%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 38.37% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹5,000
AUM545Cr
1Y Returns38.4%

Invesco India Infrastructure Fund Direct Growth

Fund Performance: This fund has given 1.79% annualized returns in the last three years. In the last year, its returns were 1.35%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 1.35% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹1,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹1,000
AUM45Cr
1Y Returns1.4%

SBI Banking & Financial Services Fund Direct Growth

Fund Performance: This fund has given 2.7% annualized returns in the last three years. In the last year, its returns were -16.44%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing -16.44% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM1,525Cr
1Y Returns-16.4%

Nippon India Pharma Fund Direct Growth

Fund Performance: This fund has given 20.6% annualized returns in the last three years. In the last year, its returns were 58.48%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 58.48% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹5,000
AUM3,653Cr
1Y Returns58.5%

Tata Banking and Financial Services Fund Direct Growth

Fund Performance: This fund has given -0.67% annualized returns in the last three years. In the last year, its returns were -17.95%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing -17.95% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM468Cr
1Y Returns-17.9%

SBI Technology Opportunities Fund Direct Growth

Fund Performance: This fund has given 23.89% annualized returns in the last three years. In the last year, its returns were 26.25%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 26.25% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM227Cr
1Y Returns26.3%

SBI Infrastructure Fund Direct Growth

Fund Performance: This fund has given 0.08% annualized returns in the last three years. In the last year, its returns were -6.55%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing -6.55% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM446Cr
1Y Returns-6.5%

UTI MNC Fund Direct Growth

Fund Performance: This fund has given 4.37% annualized returns in the last three years. In the last year, its returns were 2.24%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 2.24% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM2,178Cr
1Y Returns2.2%

Kotak Infrastructure and Economic Reform Fund Direct Growth

Fund Performance: This fund has given -5.53% annualized returns in the last three years. In the last year, its returns were -13.85%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing -13.85% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM251Cr
1Y Returns-13.8%

SBI Consumption Opportunities Fund Direct Growth

Fund Performance: This fund has given 1.67% annualized returns in the last three years. In the last year, its returns were -11.57%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing -11.57% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM589Cr
1Y Returns-11.6%

Tata India Consumer Fund Direct Growth

Fund Performance: This fund has given 5.36% annualized returns in the last three years. In the last year, its returns were 2.05%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 2.05% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM1,162Cr
1Y Returns2.0%

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