How do Sector Mutual Funds Work?

Sector or Thematic Funds are equity schemes focusing on specific industries or investment themes. They pool money from investors to invest in companies aligned with their chosen sector or theme, such as technology, health care, or green energy.

Fund managers analyse sector trends, economic policies, and company fundamentals to curate a portfolio that aligns with the fund’s strategy. For instance, a sectoral thematic mutual fund focusing on renewable energy would primarily invest in solar, wind, and other clean energy companies.