Mutual Funds
What are sector specific funds/schemes?
Sectoral Funds are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g . Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expert.
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More from this specialization
- Is there any difference between investing in a mutual fund and in an initial public offering (IPO) of a company?
- If mutual fund scheme is wound up, what happens to money invested?
- Is the higher net worth of the sponsor a guarantee for better returns?
- Can an investor appoint a nominee for his investment in units of a mutual fund?
- Are the companies having names like mutual benefit the same as mutual funds schemes?
- How will an investor come to know about the changes, if any, which may occur in the mutual fund?