Kumar Ashok, Rani Suman; International Journal of Advance Research, Ideas and Innovations in Technology © 2018, www.IJARIIT.com All Rights Reserved Page | 1132 ISSN: 2454-132X Impact factor: 4.295 (Volume 4, Issue 2) Available online at: www.ijariit.com The growth of mutual funds in India: A special reference to sectoral mutual funds Dr. Ashok Kumar sharma123suman@gmail.com IMSAR Department, Rohtak, Haryana Suman Rani sharma123suman@gmail.com IMSAR Department, Rohtak, Haryana ABSTRACT Mutual fund investment becomes an ideal investment during the last few years in India. It poses a medium risk and provides good returns to the investors on their savings. There is more than a thousand schemes are available in the market of mutual funds. Sector mutual funds are highly risky compared to the other diversified equity schemes. During the recession period, some sector performed a better and provides better return than their benchmarks. In the present study, we explain the top most popular sector funds which hold the top most assets under management of equity as well as performed well during the recession time period. These sector mutual funds are banking sector fund, Software sector fund, the Pharmaceutical sector fund, etc. Banking sector holds the 13% to 22% of the equity and well-managed sector funds provide 52.43% returns while worst managed sector provide 13.75% during the recession time period in 2008-09. Second largest equity holding sector is software sector fund. This sector holds 8% to 14%. Pharmaceutical sector grasps 6% to 8% and Auto sector seize 3% to 6% of the equity. Keywords: Sectoral Mutual Funds, Banking Sector, Software Sector, Pharmaceutical Sector Growth and Development, Assets under management. 1. INTRODUCTION Sector funds are those funds that confirm their portfolio invested in the specific sector of an economy. These funds concentrate on a particular sector such as Banking, Pharmaceutical, information technology, FMCG, natural resources, infrastructure etc. These focus on one specific industry which is expected better future and potential returns. These funds are less diversifying and more volatile compared to other diversified equity funds. These funds have sector-specific risk factor as well as the macro factor of an economy. These funds contain more risk and more profit category, these funds do not suitable for risk avoiding investors. Mutual fund houses usually avoided to lunch sector funds as these funds have a seasonal effect and perform well in cycle growth. Sector fund manager has less diversification opportunity to other sectors as compare to other equity diversified fund. Performance of fund depends on the performance of sector if sector performs better the future of fund is bright visa-versa. Developing country like India it is very easy to identify better performing sector and promising better future and good investment returns. These funds have the higher risk so retail investors in India avoid investing these funds. Only a few funds provide over expectations returns like Banking, Infrastructure, Technology, Pharmaceutical, and FMCG. Rest of many sector funds struggle to provide expected the return to the investors. Sector mutual funds can be characterized as following according to  Compare to other diversified equity funds sector funds are riskier and risk-adjusted excess return.  Sector funds are more volatile than the overall stock market.  These funds are affected by specific sector performance.  The sector fund manager tends to show any positive or negative determination of performance.  Sector funds are less diversified than other equity funds.  Each sector has extent macroeconomic risk factors.