Understanding a theme or sector is vital before you invest your money in a mutual fund scheme. Here we deconstruct the returns given by four key sectoral mutual funds i.e., infrastructure, technology, banking and pharmaceuticals.
The sectoral funds that gave maximum returns in the past one year are infrastructure and technology — posting a high return of 30.96 percent and 24.99 percent, respectively.
At the same time, banking sector funds gave an annual return of 9.15 percent and pharma gave a return of 5.41 percent, according to Value Research data.
However, the sectoral mutual fund, as a category, which has been performing consistently for past several years is technology.
The past three and five-year average returns of tech sectoral funds are 29.43 percent and 27.85 percent, respectively.
On the other extreme are banking sectoral funds which posted returns of 6.25 percent and 7.19 percent in the past three and five years, respectively.
The top sectoral fund schemes that posted highest returns in fiscal 2022
| Mutual Fund scheme | One-year-return (%) |
| Aditya Birla Sun Life Digital India Fund | 44.06 |
| DSP Natural Resources and New Energy Fund | 38.13 |
| ICICI Prudential Infrastructure Fund | 36.27 |
| ICICI Prudential Technology Fund | 50.80 |
| Invesco India Infrastructure Fund | 33.42 |
| LIC MF Infrastructure Fund | 33.10 |
| Quant Infrastructure Fund | 59.35 |
| SBI Technology Opportunities Fund | 46.36 |
| Tata Digital India Fund | 50.22 |
(Source: AMFI data; direct returns as on Mar 31, 2022)
Top performers in technology: Among the tech sectoral funds, the top funds include ICICI Prudential Technology Direct Fund that gave a return of 50.80 percent and Tata Digital India Direct Fund with a return of 50.22 percent.
Top performers in banking: Among the banking sectoral funds, the top performers are Kotak PSU Bank which gave a return of 33.09 percent, Nippon Ind ETF PSU Bank which gave a return of 33.29 percent and Nippon Ind Banking & Fin Services Dir with 23.01 percent return, shows the Value Research data.
Top performers in pharma: Among the pharma sectoral funds, the top fund schemes included Mirae Asset Healthcare Fund with 11.25 percent return and DSP Healthcare Direct Fund with a return of 7.17 percent, shows Value Research data.
Top performers in infra: Among the infra sectoral funds, the top fund schemes included Quant Infra Direct Fund that gave a return of 59.35 percent, ICICI Prudential Infra Direct which gave a return of 36.27 percent and Invesco Ind Infra Direct Fund with a return of 33.42 percent, as per AMFI data on March 31.
However, it is vital for investors to know that the historical returns are not an indicator of future performance as well. Some sectors that have done well in past may not continue to perform at the same pace. Conversely, the sectors that have not done well may surpass all expectations.
Disclaimer: This story is for educational purposes only. Please talk to a SEBI registered investment advisor before taking a financial decision.