Though mutual funds follow a bottoms-up approach while choosing stocks, fund managers are conscious about sectors the stocks belong to. They look for sectors that boast a healthy growth potential, sizeable market share and consistent profitability. Banking has been historically the most preferred sector by MFs. Banking has grown faster than India's GDP over last two decades. But it's not just banks. The listing of fund houses, insurance companies and non-bank firms opened up avenues for fund managers to capitalise on newer income streams. As more offices resorted to working from home in the pandemic, software companies capitalised and did well. Consumer non-durables and pharma were other favourites.