In the past six months, mutual fund investors have faced significant losses across most sectoral and thematic funds. According to an analysis of 171 funds in this category, around 97% of them have delivered negative returns, with only five funds managing to post modest gains during this period.
Major Losses Across Sectoral and Thematic Funds
The performance of sectoral and thematic funds has been notably poor, with 166 funds out of the total 171 posting negative returns over the last six months. This highlights the challenges faced by investors in these specialized investment products, which tend to have higher volatility compared to broader market funds.
Samco Special Opportunities Fund led the losses, dropping by around 24.31%, making it the worst performer in the sector. It was closely followed by Tata Infrastructure Fund, which posted a loss of 23.28%, and HDFC Defence Fund, which lost 23.14%. This represents a tough period for sector-focused funds, especially those targeting industries like defence and infrastructure, which were hit hard.
Other significant losers include:
- Quant PSU Fund (-22.90%)
- SBI Energy Opportunities Fund (-21.33%)
- Quant Infrastructure Fund (-20.18%)
- Quant Business Cycle Fund (-19.97%)
- Motilal Oswal Quant Fund (-18.43%)
- Nippon India Power & Infra Fund (-18.34%)
Even SBI Automotive Opportunities Fund, which focuses on the auto sector, saw a 17.68% loss.
Slight Positives Amid the Losses
Despite the overall negative trend, a few funds have managed to outperform the broader category, albeit with modest returns:
- DSP Banking & Financial Services Fund: +3.82% (the highest positive return)
- Aditya Birla SL Infrastructure Fund: -17.23%
- Aditya Birla SL Transportation and Logistics Fund: -16.96%
Other funds like SBI PSU Fund and HDFC MNC Fund also experienced losses around 17%.
Lower Losses in Specific Funds
Some funds experienced comparatively smaller losses, demonstrating more resilience in the challenging market conditions. These include:
- DSP Healthcare Fund: -0.59%
- Baroda BNP Paribas Banking and Financial Services Fund: -0.19%
Performance by Sector
The healthcare and pharmaceutical sectors were among the less volatile during the period, with Mirae Asset Healthcare Fund and Nippon India Pharma Fund losing around 6%. On the other hand, sectors like energy, infrastructure, and defence suffered much higher losses.
Conclusion
The last six months have been challenging for sectoral and thematic mutual funds, with most of them posting substantial losses. The trend highlights the risks of concentrating investments in specific sectors or themes, particularly during times of market uncertainty or sector-specific downturns. While there are a few standout performers, the broader picture suggests that investors should exercise caution and diversify their investments more broadly to mitigate risk.
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