HDFC Mutual Fund’s Top Sectoral and Thematic Funds:Many schemes of HDFC Mutual Fund, one of the largest mutual fund houses in the country, have performed well in the last one year. These include 6 sectoral and thematic funds, which have given excellent returns of 42% to 78% in the last 1 year. Seeing such excellent returns, many common investors are also investing in these funds. But should common investors invest in these funds?
Returns of HDFC’s top sectoral, thematic funds
Common investors should understand the risks associated with sectoral and thematic mutual funds before investing in them. We will discuss this issue later, but first let’s take a look at the return data of the top 6 sectoral and thematic funds of HDFC Mutual Fund.
Also read: Top 7 passive funds of SBI Mutual Fund giving returns of 40% to 62%, why ETF and index funds are better for investment
1. HDFC Defence Fund
– 1 Year Return (Regular Plan): 75.97%
, 1 Year Return (Direct Plan): 78.15%
– Benchmark: Nifty India Defence Total Return Index
– AUM: Rs 3,990.02 crore
2. HDFC Transportation and Logistics Fund
– 1 Year Return (Regular Plan): 57.19%
, 1 Year Return (Direct Plan): 59.12%
– Benchmark: Nifty Transportation & Logistics Total Return Index
– AUM: Rs 1,342.88 crore
3. HDFC Infrastructure Fund
– 1 Year Return (Regular Plan): 49.88%
, 1 Year Return (Direct Plan): 51.21%
– Benchmark: BSE India Infrastructure Total Return Index
– AUM: Rs 2,547.83 crore
Also read : Mutual Fund: Do you want regular income from SWP after retirement? You can invest in these mutual fund categories
4. HDFC Non-Cyclical Consumer Fund
– 1 Year Return (Regular Plan): 45.96%
, 1 Year Return (Direct Plan): 47.78%
– Benchmark: NIFTY India Consumption Total Return Index
– AUM: Rs 866.05 crore
5. HDFC Technology Fund
– 1 Year Return (Regular Plan): 42.83%
, 1 Year Return (Direct Plan): 44.60%
– Benchmark: BSE Teck Total Return Index
– AUM: Rs 1,331.24 crore
6. HDFC Housing Opportunities Fund
– 1 Year Return (Regular Plan): 41.52%
, 1 Year Return (Direct Plan): 42.90%
– Benchmark: Nifty Housing Total Return Index
– AUM: Rs 1,524.42 crore
(Source: AMFI)
Also read: Mutual Fund SIP: How to raise Rs 1.78 crore starting with just Rs 1000 every month!
High risk for high returns
Sectoral and thematic funds are based on a particular sector or theme, such as defense, transport or technology sector. The sectors or themes in which such funds invest may sometimes see a boom in the short term. But it is difficult for this trend to continue for a long time. Although these funds have given attractive returns in the last 1 year, their risk is also equally high. Due to the risk factors associated with different sectors or themes and the fluctuations in the business cycle, there is more turmoil in the funds associated with them. Their performance directly depends on the situation of that sector. Therefore, one thing should always be remembered about sectoral and thematic funds that along with the possibility of high returns, these funds also bring high risk.
Also read: NFO Explained: Keep these 9 things in mind before investing in mutual fund NFO, what is the difference between New Fund Offer and IPO?
It is better if new investors stay away from them
New investors whose portfolio size i.e. total investment is not much, if they invest a large part of their capital in sectoral and thematic funds, then they will not be able to create a better diversified portfolio. Usually, retail investors are advised to invest their portfolio in comparatively less risky diversified funds. If they make the mistake of chasing high returns in the short term of a fund based on a particular sector or theme and decide to invest in them for this reason, then they may have to suffer losses in the long term. For new investors, major index funds tracking large caps or multi cap funds or flexi cap funds with a more diversified base are better.
Which investors should invest money
Sectoral and thematic funds should be invested in only by experienced investors who understand the market cycle and its nuances well. If you are an experienced investor and are expecting a boom in a particular sector based on your knowledge and experience, then you can invest in these funds. But new investors cannot be advised to invest in such high-risk funds.
(Disclaimer: The purpose of this article is only to provide information, not to recommend investment in any scheme. Past returns of equity mutual funds cannot be considered as a guarantee of similar performance in future. Take any investment decision only after getting complete information and taking advice from your investment advisor.)
