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Top 5 Sector Mutual funds to invest in India in 2016 Top 5 Sector Mutual Funds to invest in 2016


In my journey of earning 1 Crore in last 5 years , I have come across several mutual fund investments which can double or triple the investment. Now I have tightened my belt and looking to double and triple or even 6 times of my money in the short to long term. I have identified top-5 mutual funds to invest which can double and triple money faster than I thought. Which are top-5 sector mutual funds to invest in 2016 which can double your money? What about growing money by 6 times in next 10 years. Here is my analysis on top-5 mutual funds that can give superior returns in next 3 to 10 years. You should consider the risks indicated in below article before investing in such sector based mutual funds.

Top 5 Sector Mutual Funds to invest in 2016


These top 5 sector mutual funds in India have been analyzed and shortlisted based on below key parameters.

  • Picked based on highest returns received in the last 5 to 10 years across various sectors.
  • These funds invest only in specific sectors and are very high risk. One has to keep an eye on the sector and in case of any downturn in this sector, one should exit.
  • Ranked based on short term returns too. Since most of the funds gave negative returns in the last 1 years due to market volatility, we have picked-up the funds which were less downside compared to peers in the last 3 months to 1 year.
  • Since these are sector based funds, Crisil or Value Research Online would give less importance in ranking and they would avoid giving ranking for such funds.
  • AUMs (Assets under management) > 100 Crores. This proves investor confidence among these top mutual funds.

Also Read: Top 10 Large Cap Mutual funds to invest in 2016 in India

Top#1: UTI Transportation and Logistics Fund


This has been one of my favorite sectors based mutual fund. This fund objective to provide Capital appreciation through investments in the stocks of the companies engaged in providing transportation services, design, manufacture, distribution or sale of transportation equipment and companies in the logistics sector.

Reasons to invest: This fund gave 45% annualized returns in last 3 years, 26% annualized returns in last 5 years and 16% annualized returns in last 10 years. This fund gave consistent returns in long run.

  • If you would have invested Rs 1 Lakh, 10 years back, the investment amount along with returns would have been Rs 4 Lakhs i.e. 4 times of your investment.
  • If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have been Rs 3.2 Lakhs i.e. 3.2 times of your investment.
  • If you would have invested Rs 1 Lakh, 1 years back, the investment amount along with returns would have been Rs 3 Lakhs i.e. 3 times of your investment.
  • If you would have invested in this scheme through SIP of Rs 1,000 per month for 5 years, your total investment would have been Rs 60,000 and your invested value along with returns would have been Rs 131,000.

If you observe, you would have made money even in the short term or even in the long term. This invests in various sub sectors in transportation and logistics. If you can take risk, invest some money into this fund.

Top#2: SBI Pharma Fund


I love this mutual fund scheme. Pharma and Healthcare are evergreen sectors. This fund's objective to to seek opportunities in Pharma Stocks in India.

Reasons to invest: This fund gave 32% annualized returns in last 3 years, 25% annualized returns in last 5 years and 14% annualized returns in last 10 years. This fund gave consistent returns in long run.

  • If you would have invested Rs 1 Lakh, 10 years back, the investment amount along with returns would have been Rs 3.7 Lakhs i.e. 3.7 times of your investment.
  • If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have been Rs 3 Lakhs i.e. 3 times of your investment.
  • If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have been Rs 2.2 Lakhs i.e. 2.2 times of your investment.
  • If you would have invested in this scheme through SIP of Rs 1,000 per month for 5 years, your total investment would have been Rs 60,000 and your invested value along with returns would have been Rs 116,000.

If you observe, you would have made money even in the short term or even in the long term even in this fund too. This invests in pharma sector where you do not expect any downturn in the long run. If you can take some risk, invest some of your portfolio into this mutual fund scheme.

Top#3: Reliance Pharma Fund


This is my second favorite scheme in Pharma sector. Pharma and Healthcare are evergreen sectors. This fund's objective to to seek opportunities in Pharma Stocks and other fixed income securities in associated companies in this sector.

Reasons to invest: This fund gave 26% annualized returns in last 3 years, 19% annualized returns in last 5 years and 21% annualized returns in last 10 years. This fund consistent returns in long run.

  • If you would have invested Rs 1 Lakh, 10 years back, the investment amount along with returns would have been Rs 6.7 Lakhs i.e. 6.7 times of your investment. Yes, you heard it right, it is 6.7 times of your investment.
  • If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have been Rs 2.3 Lakhs i.e. 2.3 times of your investment.
  • If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have been Rs 2 Lakhs i.e. 2 times of your investment.
  • If you would have invested in this scheme through SIP of Rs 1,000 per month for 5 years, your total investment would have been Rs 60,000 and your invested value along with returns would have been Rs 100,300.

If you observe, you would have made money even in the short term or even in the long term even in this fund too. In the long run, your investment would have boosted like anything. This invests in pharma sector where you do not expect any downturn in the long run. If you can take some risk, invest some of your portfolio into this mutual fund scheme.

Also Read: Which are the good tax saving mutual funds to invest in 2016?

Top#4: SBI FMCG Fund


I have been asking investors to hold any new investments into FMCG mutual funds as short term direction was not clear. Now one can look to invest in these sector funds as we could see improvement in FMCG stocks. This fund's objective is to maximize investments by looking opportunities in FMCG stocks.

Reasons to invest: This fund gave 16% annualized returns in last 3 years, 20% annualized returns in last 5 years and 17% annualized returns in last 10 years. This fund consistent returns in long run.

  • If you would have invested Rs 1 Lakh, 10 years back, the investment amount along with returns would have been Rs 4.8 Lakhs i.e. 4.8 times of your investment.
  • If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have been Rs 2.5 Lakhs i.e. 2.5 times of your investment.
  • If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have been Rs 1.6 Lakhs i.e. 1.6 times of your investment.
  • If you would have invested in this scheme through SIP of Rs 1,000 per month for 5 years, your total investment would have been Rs 60,000 and your invested value along with returns would have been Rs 88,200.

If you observe, you would have made money even in the short term or even in the long term even in this fund too. This invests in FMCG sector where you do not expect any downturn in the long run. However, margins of the companies in this sector would continue to be under pressure. If you can take some risk, invest some of your portfolio into this mutual fund scheme.

Top#5: ICICI Pru Technology Fund


Information Technology sector has been growing year on year. Several IT Stocks have been doing well in the last few years. The scheme invests in equity and related securities of technology and its dependent companies. A large share of the AUM will be invested in the stocks under the Benchmark Index, however, the scheme may also invest in other companies which form a part of the Information Technology Services Industry.

Reasons to invest: This fund gave 28% annualized returns in last 3 years, 16% annualized returns in last 5 years and 14% annualized returns in last 10 years. This fund consistent returns in long run.

  • If you would have invested Rs 1 Lakh, 10 years back, the investment amount along with returns would have been Rs 3.7 Lakhs i.e. 3.7 times of your investment.
  • If you would have invested Rs 1 Lakh, 5 years back, the investment amount along with returns would have been Rs 2.1 Lakhs i.e. 2.1 times of your investment.
  • If you would have invested Rs 1 Lakh, 3 years back, the investment amount along with returns would have been Rs 2.1 Lakhs i.e. 2.1 times of your investment.
  • If you would have invested in this scheme through SIP of Rs 1,000 per month for 5 years, your total investment would have been Rs 60,000 and your invested value along with returns would have been Rs 100,600.

If you observe, you would have made money even in the short term or even in the long term even in this fund too. This invests in FMCG sector where you do not expect any downturn in the long run. However, margins of the companies in this sector would continue to be under pressure. If you can take some risk, invest some of your portfolio into this mutual fund scheme.

Complete list of top 5 mutual funds of 2016 in table form


Top 5 Sector Mutual Funds to invest in 2016

Also Read: Best Mid-cap Mutual Funds to invest now in India in 2016  

Are these any risks involved?


These are sector based funds, hence are high risk. However if you observe, this risk is mostly when you want to get out of such schemes within short term. In long run of 5 to 10 years, you would get superior returns. If you do not need money in short term to medium term, you should invest some of your portfolio in these sector based funds. If you can get good returns in medium term, you can always sell them and book profits.

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Suresh
Top 5 Sector Mutual Funds to invest in 2016

39 comments

  • Rishi

    Hi, I am 27 years old and earn 50,000 per month. My mothly expense is 25k.

    Till date my savings are
    1. 50,000 PPF
    2. 1.3 lakh in SBI pharma MF (8000 down ). SIP 10k/month
    3. Saving account – 1 lakh

    I can invest 20k/month. Can you guide me how much % should I invest in Saving, ELSS, short and long term funds.
    Also can you suggest me some good funds to invest (low risk).

    also should i continue SIP in SBI pharma ?

  • Suresh JB

    Hi Suresh,

    The government has introduced Krish Kalyan Cess. Will this tax effect any sector positively or negatively.

    Could you please write an article on Krish Kalyan Cess and give details on which sector will be affected and how the future prospects of the market will look like.

    Thank you in advance,
    Suresh BJ

  • Sriramulu Bali

    Hi Sir,

    This is Sriram, I am 28 years old and unmarried. I am working as Software Engineer. I would like to invest 10k per month for 10 or more years with medium risk and expecting good returns. Could you please suggest do you want me to invest 10k in one fund or multiple funds by dividing amount. also provide some best fund names which will give good returns
    Thank you.

  • mamon

    Sir, I am also a regular reader and wish to travel towards corepati. I have invested around 10k (monthly SIP) in DSPBR top 100, HDFC top 200, HDFC equity, IDFC premier equity, SBI ELSS in the last five years. But, I didn’t find much improvement and redeemed all. presently I have no funds and wish to invest seeing your blog. Actually I don’t understand when to redeem or get out of the investment. Most of the MF returns decreases in long term as per comparison (3yr, 5yr, 10yr) in above table. So, if I invest in any of your above mentioned mf when should I relook/reconsider/redeem/or continue the investments.

    Suresh Sir, pl advice

    mamon

  • Jatinder

    Dear Suresh,
    I have read about below funds, these have good returns.
    Need your valuable advice on these funds. Kindly suggest whether I invest or not for a period of 3-5 years or any risk is there
    1. Canara Robeco Emerging EquitieS
    2. Tata Ethical Fund Direct Plan
    3. DSP BlackRock Micro Cap Fund

    thanks
    Jatinder

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