Assessing the returns of a mutual fund is vital to assess its overall performance. Besides this, there are other factors that induce investors to invest in a fund scheme. These include reputation of a mutual fund house, past performance of fund managers, fund’s category i.e., active or passive, among others.
Here we throw light on the performance of top-performing sectoral funds, particularly in the past five years. But first and foremost, we explain what are sectoral funds in the first place.
Sectoral/ thematic funds: These are the mutual funds which invest in a particular sector or theme of the economy e.g., information technology, financial services, FMCG, banking, manufacturing, pharma, among others. Most top performing sectoral/ thematic funds fall in the IT sector, as shown in the chart below.
|Mutual Funds||5-year-returns (%)||Benchmark returns (%)|
|ICICI Prudential Tech Fund||26.46||19.93|
|Tata Digital India Fund||25.73||23.96|
|ABSL Digital India Fund||24.55||19.93|
|Franklin India Tech fund||17.81||19.93|
(Source: AMFI; regular returns as on Oct 31, 2022)
As shown in the table above, ICICI Prudential Tech fund gave a return of 26.46 percent in past five years against the benchmark return of 19.93 percent. At the same time, Tata Digital India fund delivered a return of 25.73 percent against the benchmark return of 23.96 percent. Also, Aditya Birla Sun Life Digital India gave a return of 24.55 percent and Franklin India Tech Fund gave a return of 17.81 percent.
We share a snapshot of these top-performing sectoral funds:
ICICI Prudential Tech Fund: The fund is more than two-decade old fund which was launched in March 2000. It has given a CAGR of 12.23 percent since the inception. In other words, if someone has invested ₹10,000 at that time, it would have now grown to ₹1,36,960.
Its key stock constituents are Infosys (27.44%), TCS (12.93%), HCL Technologies (9.96%), Bharti Airtel (7.97%), Wipro (7.38%) and Tech Mahindra (6.3%).
Tata Digital India Fund: It was launched in December 2015. The size of the fund is around ₹5,981 crore. The return since inception is 17.71 percent. In other words, if someone had invested ₹10,000, the sum would have grown to ₹30,888.
Its key constituent stocks are Infosys (25.6%), TCS (13.98%), Tech Mahindra (8.92%), HCL (8.19%), Bharti Airtel (7.13%) and Wipro (3.47%).
Aditya Birla Sun Life Digital India: The fund was launched on Jan 2000. Its return since inception was 11.16 percent. This means, if someone had invested ₹10,000, it would have grown to ₹1,11,984 by now.
Its key constituents are Infosys (23.78%), TCS (9.85%), Tech Mahindra (9.51%), HCL (8.05%), Bharti Airtel (6.66%), MindTree (4.41%) and Cyient (3.19%).
Franklin India Tech Fund: This fund scheme was launched on August 1998. The annualised returns are 17.99 percent. This means, if you had invested ₹10,000 at the time of launch, it would have swelled to ₹5,52,390.
The key constituent stocks are Infosys (16.47%), TCS (13.82%), HCL (9%), Franklin Tech Fund (8.61%), Bharti Airtel (7.36%), Tech Mahindra (4.4%) and Info Edge (3.39%).
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.