Sectoral funds do not find a place in most financial plans as these are considered risky because of their focused exposure. "Once you have the core portfolio in place,it can be a good idea to take an exposure to sectoral funds from a tactical standpoint. "Unlike a sectoral fund, most diversified equity funds will not go beyond a certain limit in taking a meaningful stance on a sector." Here are some tips that can help them benefit from this category of funds.Some sectoral funds like infrastructure and banking are more volatile than even small-cap diversified equity funds. This is partly an outcome of the benchmark alignment of equity funds as part of their internal risk management practice.

Source: Economic Times September 19, 2016 00:56 UTC