10 Best Sector Mutual Funds to invest in 2018 in India

List of Best Sector Mutual Funds for 2018-minBest Sector Mutual Funds to invest in 2018 in India


Sector funds recommended by us last year gave as high as 55% returns in 1 year. Equity funds are for medium to long term. However sector funds on other hand can provide handsome returns and can double or triple your money in just 2-5 year time frame. Infra sector would continue to boom. Rural India theme is evolving now. Which are best sector mutual funds to invest in 2018 which can double or triple your money in the next 3-5 years? Would you be happy if you can double your investment in mutual funds in 5 years? Would you get excited if you can double your investment in 3 years? This article would provide Top 10 Best Sector Mutual Funds to invest in 2018 in India which can fetch you handsome returns.

Also Read: Best Tax Saving Mutual Funds for 2018 that can give 15% to 20% annualised returns

Best Sector Mutual Funds to invest in 2018 in India


These sector mutual funds in India have been analyzed and shortlisted based on below key parameters.

1) Funds picked, based on highest returns received in the last 2 to 5 years across various sectors.

2) Ranked mainly based on returns for short term to medium term.

3) Since these are sector based funds, Crisil or Value Research Online would give less importance in ranking and they would avoid giving ranking for such funds. Hence not all funds are ranked by them.

4) AUMs (Assets under management) > 100 Crores. This proves investor confidence among these top mutual funds.

5) Most of these funds could be repetition from earlier recommendations and you might be already investing in them.

6) These funds invest only in specific sectors and are very high risk. One has to keep an eye on the sector and in case of any downturn in this sector, one should exit.

10 Best Sector Mutual Funds for 2018 to invest in India


Top#1 – UTI Transportation and Logistics Fund


top sector funds for 2018 - UTI transportation fund-min

Overview: This is my all-time favorite sector mutual fund. This fund objective to provide Capital appreciation through investments in the stocks of the companies engaged in providing transportation services, design, manufacture, distribution or sale of transportation equipment and companies in the logistics sector.

Fund Performance: This fund gave 31% annualized returns in the last 5 years, 14% annualized returns in the last 3 years and 32% returns in the last 1 year.

If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have grown to Rs 3.9 Lakhs.

If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have grown to Rs 1.5 Lakhs.

If you would have invested Rs 1 Lakh, 1 year back, the investment amount along with returns would have grown to Rs 1.3 Lakhs.

Why to invest: This fund invests in travel and logistics sector which would also benefit from Govt of India New Rural theme. This fund has been consistently performing well compared to other sector funds and one of the best sector mutual funds for 2018.

Top#2: Sundaram Rural Fund


best sector funds for 2018 - sundaram rural fund-min

Overview: The scheme aims to generate consistent long-term returns by investing predominantly in equity/ equity related instruments of companies that focus on Rural India. Its top Portfolio consists of Hindustan Unilever, M&M, ITC, NCC, Tata Chemicals, UPL, Rallis India etc.,

Fund Performance:  This fund gave 21% annualized returns in the last 5 years, 19% annualized returns in the last 3 years and 32% returns in the last 1 year.

If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have grown to Rs 2.6 Lakhs.

If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have grown to Rs 1.7 Lakhs.

If you would have invested Rs 1 Lakh, 1 year back, the investment amount along with returns would have grown to Rs 1.3 Lakhs.

Why to invest: We have recommended this fund more than 8 months back and recently in our Best Mutual Fund recommendations that benefits from Rural Theme. Based on rural theme of focus from Govt of India, this fund is expected to perform well for next couple of years. This is one of the best rural based sector mutual funds to invest for 2018.

Top#3: L&T Infrastructure Mutual Fund


good sector funds for 2018 - l&t infra fund-min

Overview: The mutual fund scheme objective is to generate capital appreciation by investing primarily in companies that are engaged in the area of infrastructure. The fund would select fundamentally sound companies, having potential to deliver superior earning growth in long run.

Fund Performance: This fund gave 24% annualized returns in the last 5 years, 23% annualized returns in the last 3 years and 54% returns in the last 1 year.

If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have grown to Rs 2.9 Lakhs.

If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have grown to Rs 1.9 Lakhs.

If you would have invested Rs 1 Lakh, 1 year back, the investment amount along with returns would have grown to Rs 1.5 Lakhs.

Why to invest: We have been recommending Infra funds in the last 2 years as part of sector funds as Govt of India has been focussing on development of Infra Sector after new govt formed 3 years back. You can continue to invest in these funds for at least for 2 more years. One can take a stock after 2 years in case there is any change in focus from Govt on Infra sector. This Infra fund would be one of the best sector funds for 2018.

Top#4: ABSL Infrastructure Mutual Fund


best sector funds for 2018 - absl infra fund-min

Overview: The MF aims to provide capital appreciation by investing predominantly in a diversified portfolio of equity and equity related securities of companies that are participating in the growth and development of infrastructure in India. It also invests a small portion of its corpus in money market instruments & in ADG/GDR.

Fund Performance:  This fund gave 20% annualized returns in the last 5 years, 14% annualized returns in the last 3 years and 43% returns in the last 1 year.

If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have grown to Rs 2.5 Lakhs.

If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have grown to Rs 1.5 Lakhs.

If you would have invested Rs 1 Lakh, 1 year back, the investment amount along with returns would have grown to Rs 1.4 Lakhs.

Why to invest:  Like I indicated above, this Infra fund would be one of the best sector funds for 2018.

Top#5: ICICI Pru Banking and Financial Services Fund


Top 10 sector funds for 2018 - icici pru banking and fin services fund-min

Overview:The mutual fund aims to maximize long term capital gains by investing in equity related securities of banking, financial and non-banking financial companies which are forming part of Banking and Financial Services Industry. Huge chunk assets of the mutual fund scheme will be invested in the BSE Bankex Index stocks.

Fund Performance:  This fund gave 22% annualized returns in the last 5 years, 18% annualized returns in the last 3 years and 40% returns in the last 1 year.

If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have grown to Rs 2.7 Lakhs.

If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have grown to Rs 1.6 Lakhs.

If you would have invested Rs 1 Lakh, 1 year back, the investment amount along with returns would have grown to Rs 1.4 Lakhs.

Why to invest:  Banking and financial services sector is every green. Govt has recently started pumping more money into PSU Banks which is also a positive move. However, one needs to invest at least for 3-5 years to get good returns. This fund is one of the good sector funds for 2018.

Top#6: Reliance Banking Fund


best sector funds for 2018 - reliance banking fund-min

Overview: The fund scheme aims to generate consistent returns by investing in equity and related and fixed income securities. The proportion of investment between equity and debt will be decided based on the view of the fund manager on anticipated movement in both debts as well as equity markets.

Fund Performance:  This fund gave 17% annualized returns in the last 5 years, 14% annualized returns in the last 3 years and 39% returns in the last 1 year.

If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have grown to Rs 2.2 Lakhs.

If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have grown to Rs 1.5 Lakhs.

If you would have invested Rs 1 Lakh, 1 year back, the investment amount along with returns would have grown to Rs 1.4 Lakhs.

Why to invest: This fund has been performing consistently well in the medium to long term.  This fund too is one of the good sector funds for 2018.

Also Read: Best Platform to invest in Direct Mutual Funds Online

Top#7: SBI FMCG Fund


best sector funds for 2018 - sbi fmcg fund-min

Overview: The MF scheme seeks maximum growth opportunities through investments in FMCG stocks.

Fund Performance:  This fund gave 20% annualized returns in the last 5 years, 18% annualized returns in the last 3 years and 52% returns in the last 1 year.

If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have grown to Rs 2.5 Lakhs.

If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have grown to Rs 1.6 Lakhs.

If you would have invested Rs 1 Lakh, 1 year back, the investment amount along with returns would have grown to Rs 1.5 Lakhs.

Why to invest: FMCG started moving up after demonetization effect. We could see in the turn-around in the FMCG companies. We expect that FMCG sector would outperform well in the next 2-3 years. This is one of the top FMCG Sector Mutual Fund to invest in 2018.

Top#8: Reliance Pharma Fund


10 best sector funds for 2018 - reliance pharma fund-min

Overview: The MF scheme seeks to generate consistent returns by investing in equity / equity related or fixed income securities of Pharma and other associated companies.

Fund Performance:  This fund gave 16% annualized returns in the last 5 years, 4% annualized returns in the last 3 years and 8% returns in the last 1 year.

If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have grown to Rs 2.1 Lakhs.

If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have grown to Rs 1.1 Lakhs.

If you would have invested Rs 1 Lakh, 1 year back, the investment amount along with returns would have grown to Rs 1.1 Lakhs.

Why to invest: Pharma was in downturn till last 6 months back. Now it is taking U turn and turning to positive in the last few months. We expect that Pharma would outperform in the next 1-2 years and we should see that this Pharma fund would be best among the sector funds for 2018.

Top#9: ICICI Pru Tech Fund


best sector funds for 2018 - icici pru tech fund-min

Overview: The scheme will seek long term capital appreciation by investing in equity and equity related securities of technology and technology dependent companies. A large share of the AUM will be invested in the stocks under the Benchmark Index, however, the scheme may also invest in other companies which form a part of Information Technology Services Industry.

Fund Performance:  This fund gave 18% annualized returns in the last 5 years, 3% annualized returns in the last 3 years and 28% returns in the last 1 year.

If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have grown to Rs 2.3 Lakhs.

If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have grown to Rs 1.1 Lakhs.

If you would have invested Rs 1 Lakh, 1 year back, the investment amount along with returns would have grown to Rs 1.3 Lakhs.

Why to invest: Mr. Trump decisions are scaring Indian Technology companies who are majorly dependent on projects from USA. However, in recent times, we could see turnaround in the India technology companies which are focusing more on non US business and reviving business from USA. The recent Quarterly results from TCS and Infy also gives positive indication about technology companies performance in coming Quarters. I feel Technology funds are now moving positively and would be top sector funds to invest now in 2018.

Top#10: ABSL New Millennium Fund


Good sector funds for 2018 - absl new millennium fund-min

Overview: The fund seeks capital growth, with a secondary objective of income generation with focus on technology and technology dependent companies. The scheme will follow a bottom-up approach to stock picking, adopting a blend of value and growth style of investing.

Reasons to invest: This fund gave 18% annualized returns in the last 5 years, 10% annualized returns in the last 3 years and 33% returns in the last 1 year.

If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have grown to Rs 2.3 Lakhs.

If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have grown to Rs 1.3 Lakhs.

If you would have invested Rs 1 Lakh, 1 year back, the investment amount along with returns would have grown to Rs 1.3 Lakhs.

Why to invest: Like I indicated, even this fund would get benefitted from positive news from technology companies performance. Good sector fund to invest now.

Also Read: Best Low Risk Mutual Funds to invest in India

Summary of the Best Sector Mutual Funds to invest in 2018 in India


List of Best Sector Mutual Funds for 2018-min

Are these any risks involved?


These are sector based funds, hence are high risk. One needs to keep an eye about the sector and get out of those funds if such sector turns negative.

If you enjoyed this article, share it with your friends and colleagues through Facebook and Twitter.

Suresh

Best Sector Mutual Funds to invest in 2018 in India

44 comments

  • Vaskar Basak

    Hello Suresh,

    I like your blogs.I have a query Can I stop investing and just hold the past units in my mutual funds(SIP)?

    Thanks,
    Vaskar

  • Annie

    Hi suresh,

    I have been investing in the SBI pharma fund for nearly 2 years. I find that the fund is not doing too well and the sector as such is not doing great. Should I stay invested or should I stay invested, stop the SIP and divert the amount to some other sector?

    Annie

    • Annie, This is good fund, however due to pharma being down, it is impacting this fund. If you are high risk investor, you can continue this for next 2-3 years, otherwise, you can exit.

  • Arvind

    Hi suresh, 

    I like your blogs. I am interested in investing upto 20-30000/month for 15-20-25 yrs. I am looking to invest in 2 large cap, 2 mid cap, 1 small cap and 2 diversified. Can you suggest? Is there any paid service/advice being provided? If yes, how can I avail that?

     

    Best regards

     

    Arvind

  • Kshitij Belanki

    Hi. Willing to invest Rs 5 lac lump sum in UTI FOCUSSED EQUITY FUND SERIES-VI (1150 DAYS). Need suggestions. Shall I go for it or no?

    • Hi Kshitij, Since this is close ended fund, you can invest lumpsum. However there is no guarantee of returns. Since it is new fund, the performance is unknown at this point of time. If you can invest for 5+ years, you can go for some of the best performing balanced funds indicated in this article

  • Venkata Rao

    Dear Suresh,

    I have read few blogs of yours and wish to read all the blogs. The information provided is very useful and to the point. Thank you very much for sharing such informative articles.

    Regards,
    Venkata

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