The most common approach while buying a mutual fund scheme is by looking at the past performance. Financial planners would also add another line: see how the scheme has performed over two cycles -- one bull and one bear -- to see how it has managed during good and bad times.
Unfortunately, the same theory does not apply when investing in sector funds. Many investors would be eyeing some sector funds, such as technology and FMCG, because they have withstood the fall in markets better.
Over the past year, the category average returns of technology funds (-1.35%) and FMCG funds (0.90%) have performed better than diversified-equity categories. The category average returns of large-cap funds is down -9.07%. But there have been diverse performance on the sector fund front. While some of these have done better, a number of them have suffered as well. For example, banking funds (-14.25%) and infrastructure funds (-11.93%) have fared quite badly, according to data from Value Research. The Sensex is down -1.58% in the same period.
