Sectoral and thematic funds were the investors' favorite over the last two years. AMFI data shows that this category added the most number of new folios--of around 50 lakh--among the active equity-oriented categories during this period. These funds are concentrated bets investing in the one or few sectors. Technology and commodity funds attracted the most inflows. But sector funds are a double-edged sword. They can give high returns, but also come with a high risk. It's okay to invest in sector funds as long as you understand the sector and what drives it.