What are sector specific funds?

Sector specific funds 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.

There are a number of AMC's that have good schemes for sector specific funds. Reliance Mutual Funds, HDFC, ICICI Prudential are some of these AMC's. Their websites have all of the necessary information for investors.