Mutual Funds – Sector/industry Breakdown

Sector/industry breakdown of a mutual fund shows its investments across different sectors like banks, technology, healthcare etc. This gives an idea to an investor/prospective investor on the strategy of the fund. If you can pick current booming sectors and matured sectors then you can evaluate the amount of risk the fund is taking and what level of profits it’s aiming for.
 
Calculation

Let’s say an AUM of a mutual fund is Rs 100 cr. And it invested 20 Cr in the securities of a banking company ABC and 10 Cr in Telecom Company DEF and 20 Cr in one more Telecom company XYZ and also invested 20 Cr in ZZZ company and 20Cr in YYY company which are in healthcare domain and it holds 10Cr cash to meet redemption requests.
 
Then the Sector breakdown of the mutual fund would become

Tele Communications 40%
Healthcare 40%
Banking      10%
Cash            10%

 

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January 1, 2010 | Filed Under Mutual Funds 

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