1. There is no need to keep sector funds in your portfolio for long-term wealth creation as there are no solid reasons for additional exposure in them.
2. They are seasonal and highly volatile in their returns, require close monitoring, aggressive review, and rebalancing, which can lead to the avoidable habit of "timing the market".
3. If you invest in sector funds, you’re also limiting your overall equity exposure although you're paying full price for it.
4. Diversification best suits long-term mutual fund investment, and sectoral funds just distract you.
5. Even when you need a "growth push", it's better to add a consistent highly rated mid/small-cap fund, instead of a sector fund, as it would still contain a "diversified basket of stocks" belonging to different sectors.
2. They are seasonal and highly volatile in their returns, require close monitoring, aggressive review, and rebalancing, which can lead to the avoidable habit of "timing the market".
3. If you invest in sector funds, you’re also limiting your overall equity exposure although you're paying full price for it.
4. Diversification best suits long-term mutual fund investment, and sectoral funds just distract you.
5. Even when you need a "growth push", it's better to add a consistent highly rated mid/small-cap fund, instead of a sector fund, as it would still contain a "diversified basket of stocks" belonging to different sectors.