Sectoral And Thematic Funds: The Sector That Has The Most New Funds This Year

New fund offers accounted for more than 55% of inflows into the sectoral and thematic categories in August, according to AMFI. With at least one NFO opening every month since January 2024, the traction towards these schemes has only grown among investors.

Fund houses launched five new NFOs in August, taking the total so far since January to 29, bringing the total amount of inflows to Rs 53,662 crore.

With nine NFOs, June saw the highest number of new fund offerings, bringing the largest monthly inflow of Rs 12,947 crore in the first eight months of 2024. January, April, and May saw the least number of NFO launches, each with one. The months of February, March, and August each witnessed five new launches.

So far in 2024, there has been a wide array of sectors that have seen launches of multiple new funds. The manufacturing sector leads with most number of fund offers.

More than five fund houses including Motilal Oswal Mutual Fund, Mahindra Manulife Mutual Fund, HDFC Mutual Fund and Baroda BNP Paribas Mutual Fund have launched NFOs in this space since January.

There has also been a notable increase in the number of 'business cycle' funds with the addition of four new schemes.

Special opportunities funds, banking and financial services and innovation closely follow with three schemes, each, into these sectors.

The top performers over a one year have been spread across a few sectors. The Quant BFSI Fund has beaten the benchmark by 26.2%, followed by Franklin India Opportunities Fund with a 24.6% outperformance.

The 360 ONE Quant Fund and Nippon India US Equity Opportunities Fund also comfortably beat the benchmarks with a 20.1% outperformance.

When it comes to investing into NFOs, the absence of past performance would require the investors to take a call based on other elements like the fund managers' past performance and the risk tolerance of their portfolio.