True to their label, sector mutual funds investing in a particular sector or a few continued exhibiting volatile performance in 2021. While the technology oriented funds delivered outperforming return in 2021, banking and pharma funds underperformed the market barometers. But in 2020, pharma funds were ahead of the pack. Performance of the sector funds are cyclical in nature and have been inconsistent in most of the time frames. That’s why sector and thematic funds are not part of MC30 and recommends only quality diversified funds. In diversified equity funds, the outperforming sector will offset the loss caused by the underperforming one and lead to deliver a balanced return over the period.
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