Sector funds beat diversified funds in SIP returns
17 Mar 2016
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Systematic investment plans (SIPs) in sector and thematic funds have fared far better than that in diversified equity mutual funds over a 10-year period. A SIP of Rs 10,000 per month in five sector funds vis a vis the top five diversified equity mutual funds (by AUM) over 10 years would have made investors richer by Rs 13.71 lakh.

A lot of these defensive sectoral funds and themes like pharma, FMCG and MNC benefitted from volatility globally between 2008 and 2015. At such times, cash rich companies and low-debt MNCs tend to outperform,

The following table illustrates how Sector specific funds exceeded in returns compared to Diversified funds