look news india
The popularity of mutual fund schemes that bet on specific sectors and economic themes skyrocketed last year, as high returns and the aggressive strength of asset managers drove investors to invest in these schemes. Assets under management (AUM) in this equity category increased from Rs 1.22 lakh crore in FY 2023-24 to Rs 2.93 lakh crore from Rs 1.7 lakh crore a year ago, the highest by any equity category during this period. Had the highest AUM. This category includes infrastructure, technology, pharma, business cycle and banking schemes.
The number of investor portfolios of sectoral and thematic funds increased by 38 per cent to 1.82 crore from 1.32 crore last year, while the number of schemes in this category increased from 126 to 160 in the same period. High returns from some thematic funds were the main factor attracting investors towards them. For example, last year CPSE ETFs gave returns of 108 per cent and PSU equity funds gave returns between 85 per cent and 98 per cent.
Notably, most of the money collected through these schemes is due to fund launches. Rules prevent fund houses from running more than one scheme in a category, so the industry has found a way around these rules by launching schemes on different themes. Last year, the fund house had launched thematic funds on topics such as manufacturing, business cycle and innovation funds.