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Sectoral mutual funds: Defence, metals gave double-digit returns in 2 years while tech, consumer in red — here's why
Mint 1 hr ago·28 Sept 2026, 6:20 pm
Sectoral mutual funds have shown a stark divergence in performance over the last two years. While funds focused on defence and metals have delivered double-digit returns, technology and consumer funds have struggled to stay in the black. This difference is largely driven by global economic cycles and domestic demand. Defence funds have benefited from strong government spending and export opportunities, while metals have surged on the back of high commodity prices. Conversely, tech funds have faced headwinds from global interest rate hikes, and consumer funds have been impacted by a slowdown in discretionary spending.
For investors, this highlights the importance of understanding the economic drivers behind specific sectors. Sectoral funds can be volatile and are best suited for investors with a high risk appetite who can tolerate significant fluctuations in value. It is crucial to remember that these funds often move in opposition to each other, meaning a gain in one sector can sometimes come at the expense of another. Investors should carefully evaluate their own risk tolerance and investment horizon before allocating capital to these funds.
Excerpt from Mint
Sectoral mutual funds have seen a sharp divergence in returns over the past two years, with some sectors delivering strong gains while others slipped into the red. Here's what drove this divergence, and what should investors consider before making sectoral bets. Investors in sectoral mutual funds should look at how…Read the original at Mint
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