A COMPREHENSIVE ANALYSIS OF SECTORAL MUTUAL FUNDS: EVALUATING RISK-ADJUSTED RETURNS AND PERFORMANCE METRICS AT INDIA INFOLINE

Abstract

Sectoral funds are mutual fund schemes that invest exclusively in specific sectors of the economy, such as banking, healthcare, technology, infrastructure, or energy. This study aims to evaluate the performance of sectoral funds by analyzing their returns, volatility, and risk-adjusted performance over a selected time period. The objective is to understand how these funds behave under different market conditions and economic cycles. Key financial metrics such as Sharpe Ratio, Beta, Alpha, and Standard Deviation are used to compare performance across sectors. The study highlights that while sectoral funds have the potential to deliver high returns, they also carry higher risk due to their limited diversification. The findings show that performance is highly dependent on sectoral trends, policy changes, and macroeconomic factors. The research concludes that sectoral funds are suitable for investors with a high-risk appetite and sector-specific knowledge, and they should be used as part of a diversified portfolio for optimal results.