Defence, metals top sectoral fund returns in 2 years
Defence and metals were the top-performing sectoral mutual fund categories over the past two years, delivering double-digit returns while technology and consumer funds lagged, Motilal Oswal’s India Strategy report found.
Defence delivered a 19% two-year CAGR and metals 14% as of September 25, Mint reported. PSU banks returned 10%, while technology fell 18% and consumer funds dropped 17%.
The divergence came even as the broader market stayed range-bound below its September 2024 peak. Sector-specific earnings growth and valuation changes drove the gap.
Fresh AMFI data also showed sectoral and thematic fund inflows falling over 69% in September, signalling that investor appetite for concentrated bets is cooling. DSP World Mining Overseas Equity Omni FoF posted the highest September return of about 13.15%, the Economic Times reported. HDFC Defence Fund gave a 3.14% return in the month.
What happens next: analysts advise SIPs over lumpsums in sectoral funds and keeping sectoral exposure within 5-10% of portfolios.
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