Sector Funds

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Sector Funds invest in a single type of industry, or in other words, a single sector. Sector funds can be highly profitable.

Definition and features of the Sector Funds:

The Sector Funds are those types of mutual funds which accumulate stocks of particular sector.

In other words sector funds invest in a single type of industry, like Information Technology, Telecommunication, Pharmaceuticals, Infrastructure, etc.

The Sector Funds are structured in this particular manner in order to take advantage of growth of particular type of industry. The Sector Funds can offer tremendous profit to the investor if the funds are carefully chosen. The authorities to the Sector Funds in India are the Association of Mutual Funds of India (AMFI), which operates in accordance with the laid down guidelines of the Securities and Exchange Board of India (SEBI). Moreover, investments in Sector Funds offer tax exemptions to the investors (Chapter III of the Income Tax Act, 1961). With the growth of the Indian industries the financial markets have undergone tremendous transformation. The rise of different sectors has necessitated structuring of sector specific funds to attract substantial amount of money for the growth of a specific sector in India.

To knoe more about Classification of Mutual Funds click on the following links:

Last Updated 06/30/2011

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