Top 5 Sector Mutual Funds to invest in 2016
In my journey of earning 1 Crore in last 5 years, I have come across several mutual fund investments which can double or triple the investment. Now I have tightened my belt and looking to double and triple or even 6 times of my money in the short to long term. I have identified top-5 mutual funds to invest which can double and triple money faster than I thought. Which are top-5 sector mutual funds to invest in 2016 which can double your money? What about growing money by 6 times in next 10 years. Here is my analysis on top-5 mutual funds that can give superior returns in next 3 to 10 years. You should consider the risks indicated in below article before investing in such sector based mutual funds.
Top 5 Sector Mutual Funds to invest in 2016
These top 5 sector mutual funds in India have been analyzed and shortlisted based on below key parameters.
- Picked based on highest returns received in the last 5 to 10 years across various sectors.
- 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.
- Ranked based on short term returns too. Since most of the funds gave negative returns in the last 1 years due to market volatility, we have picked-up the funds which were less downside compared to peers in the last 3 months to 1 year.
- 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.
- AUMs (Assets under management) > 100 Crores. This proves investor confidence among these top mutual funds.
Also Read: Top 10 Large Cap Mutual funds to invest in 2016 in India
Top#1: UTI Transportation and Logistics Fund
This has been one of my favorite sectors based 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.
Reasons to invest: This fund gave 45% annualized returns in last 3 years, 26% annualized returns in last 5 years and 16% annualized returns in last 10 years. This fund gave consistent returns in long run.
- If you would have invested Rs 1 Lakh, 10 years back, the investment amount along with returns would have been Rs 4 Lakhs i.e. 4 times of your investment.
- If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have been Rs 3.2 Lakhs i.e. 3.2 times of your investment.
- If you would have invested Rs 1 Lakh, 1 years back, the investment amount along with returns would have been Rs 3 Lakhs i.e. 3 times of your investment.
- If you would have invested in this scheme through SIP of Rs 1,000 per month for 5 years, your total investment would have been Rs 60,000 and your invested value along with returns would have been Rs 131,000.
If you observe, you would have made money even in the short term or even in the long term. This invests in various sub sectors in transportation and logistics. If you can take risk, invest some money into this fund.
Top#2: SBI Pharma Fund
I love this mutual fund scheme. Pharma and Healthcare are evergreen sectors. This fund's objective to to seek opportunities in Pharma Stocks in India.
Reasons to invest: This fund gave 32% annualized returns in last 3 years, 25% annualized returns in last 5 years and 14% annualized returns in last 10 years. This fund gave consistent returns in long run.
- If you would have invested Rs 1 Lakh, 10 years back, the investment amount along with returns would have been Rs 3.7 Lakhs i.e. 3.7 times of your investment.
- If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have been Rs 3 Lakhs i.e. 3 times of your investment.
- If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have been Rs 2.2 Lakhs i.e. 2.2 times of your investment.
- If you would have invested in this scheme through SIP of Rs 1,000 per month for 5 years, your total investment would have been Rs 60,000 and your invested value along with returns would have been Rs 116,000.
If you observe, you would have made money even in the short term or even in the long term even in this fund too. This invests in pharma sector where you do not expect any downturn in the long run. If you can take some risk, invest some of your portfolio into this mutual fund scheme.
Top#3: Reliance Pharma Fund
This is my second favorite scheme in Pharma sector. Pharma and Healthcare are evergreen sectors. This fund's objective to to seek opportunities in Pharma Stocks and other fixed income securities in associated companies in this sector.
Reasons to invest: This fund gave 26% annualized returns in last 3 years, 19% annualized returns in last 5 years and 21% annualized returns in last 10 years. This fund consistent returns in long run.
- If you would have invested Rs 1 Lakh, 10 years back, the investment amount along with returns would have been Rs 6.7 Lakhs i.e. 6.7 times of your investment. Yes, you heard it right, it is 6.7 times of your investment.
- If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have been Rs 2.3 Lakhs i.e. 2.3 times of your investment.
- If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have been Rs 2 Lakhs i.e. 2 times of your investment.
- If you would have invested in this scheme through SIP of Rs 1,000 per month for 5 years, your total investment would have been Rs 60,000 and your invested value along with returns would have been Rs 100,300.
If you observe, you would have made money even in the short term or even in the long term even in this fund too. In the long run, your investment would have boosted like anything. This invests in pharma sector where you do not expect any downturn in the long run. If you can take some risk, invest some of your portfolio into this mutual fund scheme.
Also Read: Which are the good tax saving mutual funds to invest in 2016?
Top#4: SBI FMCG Fund
I have been asking investors to hold any new investments into FMCG mutual funds as short term direction was not clear. Now one can look to invest in these sector funds as we could see improvement in FMCG stocks. This fund's objective is to maximize investments by looking opportunities in FMCG stocks.
Reasons to invest: This fund gave 16% annualized returns in last 3 years, 20% annualized returns in last 5 years and 17% annualized returns in last 10 years. This fund consistent returns in long run.
- If you would have invested Rs 1 Lakh, 10 years back, the investment amount along with returns would have been Rs 4.8 Lakhs i.e. 4.8 times of your investment.
- If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have been Rs 2.5 Lakhs i.e. 2.5 times of your investment.
- If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have been Rs 1.6 Lakhs i.e. 1.6 times of your investment.
- If you would have invested in this scheme through SIP of Rs 1,000 per month for 5 years, your total investment would have been Rs 60,000 and your invested value along with returns would have been Rs 88,200.
If you observe, you would have made money even in the short term or even in the long term even in this fund too. This invests in FMCG sector where you do not expect any downturn in the long run. However, margins of the companies in this sector would continue to be under pressure. If you can take some risk, invest some of your portfolio into this mutual fund scheme.
Top#5: ICICI Pru Technology Fund
Information Technology sector has been growing year on year. Several IT Stocks have been doing well in the last few years. The scheme invests in equity and related securities of technology and its 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 the Information Technology Services Industry.
Reasons to invest: This fund gave 28% annualized returns in last 3 years, 16% annualized returns in last 5 years and 14% annualized returns in last 10 years. This fund consistent returns in long run.
- If you would have invested Rs 1 Lakh, 10 years back, the investment amount along with returns would have been Rs 3.7 Lakhs i.e. 3.7 times of your investment.
- If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have been Rs 2.1 Lakhs i.e. 2.1 times of your investment.
- If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have been Rs 2.1 Lakhs i.e. 2.1 times of your investment.
- If you would have invested in this scheme through SIP of Rs 1,000 per month for 5 years, your total investment would have been Rs 60,000 and your invested value along with returns would have been Rs 100,600.
If you observe, you would have made money even in the short term or even in the long term even in this fund too. This invests in FMCG sector where you do not expect any downturn in the long run. However, margins of the companies in this sector would continue to be under pressure. If you can take some risk, invest some of your portfolio into this mutual fund scheme.
Complete list of top 5 mutual funds of 2016 in table form
Also Read: Best Mid-cap Mutual Funds to invest now in India in 2016
Are these any risks involved?
These are sector based funds, hence are high risk. However if you observe, this risk is mostly when you want to get out of such schemes within short term. In long run of 5 to 10 years, you would get superior returns. If you do not need money in short term to medium term, you should invest some of your portfolio in these sector based funds. If you can get good returns in medium term, you can always sell them and book profits.
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Suresh
Top 5 Sector Mutual Funds to invest in 2016
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I want to invest 2000 rs. Per month in sector fund fir long term i.e. 10 to 15 years. Please suggest best 5 sector mutual fund.
How to rotate sector funds. If we hold very long sectorial cycles will be missed and returns average out. Pl suggest . thanks .
Hi,
I have selected below 9 funds to build my portfolio. Could you please suggest whether there are any better opportunities which I might have overlooked:
1) Large cap: SBI Bluechip Fund
2) Mid cap: HDFC Midcap Opp Fund + Franklin India Prima Fund
3) Small Cap: Franklin India Smaller Companies Fund + DSP Blackrock Micro cap fund
4) Multi Cap: Birla Sunlife equity fund
5) Sector Funds: SBI Pharma + ICICI Pru Banking
6) Tax Saver: DSP Blackrock Tax Saver Fund
Thank you.
Regards,
Satish
Hi Suresh,
Thanks for the great assistance on MF.I had asked this earlier in my comments, but would like to know, How tax and TDS calculated for NRI? Are we allowed to invest in any fund except PPF?
It would be greatly helpful if you could elaborate on this context!
Hi Anu, Mutual fund house or broker does not deduct any income tax on your MF returns. Individual need to compute on his own. Pls see this article about how mutual fund returns are taxed. The only change in this article is debt funds are taxed as short term for 36 months or long term after 36 months. https://myinvestmentideas.com/2013/04/how-mutual-fund-returns-are-taxed/
As an NRI following your blog, you're doing a fabulous job. Have you started consultancy services yet?
If someone has to invest in SBI Pharma and UTI Transportation and Logistics, how do we go about getting this done from abroad? All my other mutual funds are taken care of by my account manager at the bank but these funds don't fall under their radar for some reason.
Thanks for whatever advice you can provide.
Hi Sree, thanks for your compliments. I provide only free service :-). If you have any MF account, you can invest in the funds indicated by you.
hi sree,
you may directly open the account/folio by visiting the fund house web site and may invest on-line in these MF directly. eg. if you want to SBI pharma fund, just go to sbimutual fund web portal, create a folio, online and can invest. for more you may contact to the customer care personnel of that MF portal.
cheers!
inder singh
Which fund ideal in my age 62 gives 13% returns after3 years
What is multibagger fund? Which are they…thx.
there are no such multibagger funds. It could be multi-cap fund. Pls post your exact query.
HI Sir ,
I was doing SIP in UTI transport and SBI pharma returns are good but not great , Can you please evaluvate and tell me does these funds has such potentials to double or triple our money
Suresh Ji
Should I opt Sip or lumpsum option for investing in UtI infrastructure or SBI pharma?..And for how many years should I invest it?
Dear Suresh,
I want to invest in pharma sector, is it better to invest in SBI pharma sector fund or in a pharma stock like Ajantha pharma. Am a long term investor.
Thanks in advance
Investing in pharma stocks, you may need to be careful. However pharma funds too gave higher returns. You can invest in SBI Pharma fund.
Hi, I am 27 years old and earn 50,000 per month. My mothly expense is 25k.
Till date my savings are
1. 50,000 PPF
2. 1.3 lakh in SBI pharma MF (8000 down ). SIP 10k/month
3. Saving account – 1 lakh
I can invest 20k/month. Can you guide me how much % should I invest in Saving, ELSS, short and long term funds.
Also can you suggest me some good funds to invest (low risk).
also should i continue SIP in SBI pharma ?
Rishi, you are just investing in one sector fund. Invest in large cap funds and mid-cap funds. You can allocate 20% in sector based funds
Hi Suresh,
The government has introduced Krish Kalyan Cess. Will this tax effect any sector positively or negatively.
Could you please write an article on Krish Kalyan Cess and give details on which sector will be affected and how the future prospects of the market will look like.
Thank you in advance,
Suresh BJ
Hi Sir,
This is Sriram, I am 28 years old and unmarried. I am working as Software Engineer. I would like to invest 10k per month for 10 or more years with medium risk and expecting good returns. Could you please suggest do you want me to invest 10k in one fund or multiple funds by dividing amount. also provide some best fund names which will give good returns
Thank you.
If you want to invest in medium risk, consider investing in a comibination of large cap fund balanced fund. You can invest in ICICI focussed blue chip fund + Birla SL Frontline equity fund + HDFC balanced fund
Thanks suresh i have also ffollowed
In same ssequence
Sir, I am also a regular reader and wish to travel towards corepati. I have invested around 10k (monthly SIP) in DSPBR top 100, HDFC top 200, HDFC equity, IDFC premier equity, SBI ELSS in the last five years. But, I didn’t find much improvement and redeemed all. presently I have no funds and wish to invest seeing your blog. Actually I don’t understand when to redeem or get out of the investment. Most of the MF returns decreases in long term as per comparison (3yr, 5yr, 10yr) in above table. So, if I invest in any of your above mentioned mf when should I relook/reconsider/redeem/or continue the investments.
Suresh Sir, pl advice
mamon
Dear Suresh,
I have read about below funds, these have good returns.
Need your valuable advice on these funds. Kindly suggest whether I invest or not for a period of 3-5 years or any risk is there
1. Canara Robeco Emerging EquitieS
2. Tata Ethical Fund Direct Plan
3. DSP BlackRock Micro Cap Fund
thanks
Jatinder
I am already investing 11k monthly in L&T, Sundaram, Kotak mutual funds. For 2016 I would like to increase my investment to 4k. can you please suggest the Mutual funds which will have good returns for 3 years/5 years.
Sir, I am currently investing in Hdfc mutual funds for 10000 rupees.are they under performing now? kindly advice.
Pls inform the scheme names under HDC Sreelekha. I can advice you further on this
how to invest in these funds directly are we to go to each AMC of these funds and start an SIP..i would like to invest in DIRECT.Please advise
Please share something information about corporate deposits options “Shriram transport Ltd” “Punjab housing finanace limited”.
Sir, Thank you so much for another wonderful article. I am investing on UTI MNC Fund with SIP rs 5000 from last 8 months. MNC fund is not working good.
I want to switch it with one of following funds.
1. UTI EQUITY
2. UTI Transport and Logistics Fund
Kindly advice.
MNC funds can under-perform in long run. I have indicated this earlier. However you can continue to invest as of now. Due to market volatality, many funds are giving negative returns. Alternatively, you can switch to the funds indicated by you.
Hi suresh , thanks for guidance , however I just wanted to know ,that uti transportation nd logistic fund , which u indicated , which scheme is used growth option or dividend option or dive dent reinvestment etc …nd same question for SBI pharma fund too, thanks
Hi Rajesh, Consider investing in growth option.
Hi Suresh
Very informative article, I have a clarification on a different area, please advise
SBH is offering rupee max gain for NRE and when compared with FD’s the returns are as follows: please advise if its good to proceed with FCNR Max rupee Gain option with SBH State Bank of Hyderabad
Deposit amount – 50 lacs
Interest rate – 7.95 option
Period – 3 years
Total return including interest- (Rs.6331889/-)
Deposit amount – 50 lacs
Interest rate – max rupee gain option
Period – 3 years
Total fixed return amount including interest – (Rs.6475000/-)
NRE FD Schemes offer tax free interest. If you are looking for fixed income, you can proceed
Hi,
I have below SIP and I am investing 1 K per month. please let me know if this is ok from right portfolio prospective. Also i invested lumpsum in franklin smaller fund, let me know if this is ok to continue with the same.
Axis LT Equity Fund(G) 8,000.00
Birla SL Top 100 Fund(G) 4,000.00
BNP Paribas Mid Cap Fund(G) 1,000.00
Franklin Build India Fund(G) 1,000.00
Franklin India High Growth Cos Fund(G) 8,000.00
Franklin India Smaller Cos Fund(G) 31,000.00
HDFC Mid-Cap Opportunities Fund(G) 2,000.00
ICICI Pru Technology Fund(G) 1,000.00
ICICI Pru Value Discovery Fund(G) 2,000.00
Mirae Asset Emerging BlueChip-Reg(G) 2,000.00
SBI Magnum MidCap Fund-Reg(G) 2,000.00
SBI Pharma Fund-Reg(G) 1,000.00
As an investor If i do a sip in both the above pharma funds then Wouldnt sbi pharma fund and reliance pharma fund have many stocks in common? coz nearly 42% of stocks are common in both funds so wouldnt investing in only one of these 2 make more sense?
You can do that Aarav. However, if they are investing in same funds during same period, why the returns are different. This depends on the strategy they adopt in investing at right time. They could be wrong sometimes, hence the returns could vary.
Thanks Suresh the article..however, most of the funds mentioned here are not Crisil rated..any reason?
co-incidentally today morning I was looking at UTI logistics fund but kept my decision of investing on hold since it was not Crisil ranked.
Crisil does not tank Sector funds. These are sector based, hence high risk. However in long run, I felt they are excellent funds