Nearly half of mutual funds inflows seen in sectoral funds. How healthy is the trend?

Sectoral and thematic MF inflows have increased significantly, with almost 50% of equity mutual fund investments directed here in FY25. Sebi’s categorisation rules restrict launching diversified funds, pushing fund houses to create theme-based offerings. Experts caution that such funds should only form a small part of investment portfolios and advise diversification for long-term stability.
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