Best Sectoral & Thematic Mutual Funds
Sectoral and thematic funds must keep at least 80% in the equity of one sector (banking, pharma, technology) or one theme (consumption, manufacturing, ESG). That concentration is the point and the risk: with no mandate to diversify away from the sector, the fund rises and falls with it.
Top sectoral & thematic mutual funds by 3Y returns
20Direct plan, Growth option — ranked by 3-year CAGR. Open a fund for NAV history, rolling returns, risk metrics and peer rank.
As of 05 Oct 2026, Nippon India Taiwan Equity Fund (Direct plan, Growth option) leads sectoral & thematic mutual funds on 3-year CAGR at +62.66%, followed by HDFC Defence Fund at +36.08% and HDFC Pharma and Healthcare Fund at +30.26%. Across 256 sectoral & thematic mutual funds the category averaged +13.45% over three years, at an average expense ratio of 1.27%. All figures are computed from public AMFI NAV history and recomputed daily; past returns do not predict future ones.
| 1 | Nippon India Taiwan Equity Fund Nippon India | ★★★★☆ | +121.5% | +62.7% | — | 1.06% | ₹1,110Cr |
| 2 | HDFC Defence Fund HDFC | ★★★★☆ | +22.6% | +36.1% | — | 0.89% | ₹9,371Cr |
| 3 | HDFC Pharma and Healthcare Fund HDFC | ★★★★★ | +26.6% | +30.3% | — | 1.03% | ₹2,282Cr |
| 4 | Franklin Asian Equity Fund Franklin Templeton | ★★★☆☆ | +33.4% | +24.0% | +9.5% | 1.21% | ₹720.84Cr |
| 5 | Nippon India Japan Equity Fund Nippon India | ★★★☆☆ | +30.6% | +23.2% | +11.6% | 1.37% | ₹330.20Cr |
| 6 | HDFC Transportation and Logistics Fund HDFC | ★★★★☆ | +4.8% | +23.2% | — | 1.09% | ₹1,685Cr |
| 7 | SBI Healthcare Opportunities Fund SBI | ★★★★★ | +20.2% | +22.8% | +17.8% | 1.01% | ₹4,319Cr |
| 8 | Aditya Birla Sun Life International Equity Fund Aditya Birla Sun Life | ★★★★☆ | +18.0% | +22.6% | +13.3% | 1.99% | ₹320.62Cr |
| 9 | LIC MF Infrastructure Fund LIC | ★★★☆☆ | +8.9% | +22.6% | +21.5% | 1.28% | ₹1,062Cr |
| 10 | UTI - Healthcare Fund UTI | ★★★★☆ | +16.7% | +22.5% | +15.3% | 1.34% | ₹1,181Cr |
| 11 | Mirae Asset Healthcare Fund Mirae Asset | ★★★★★ | +20.3% | +21.7% | +15.3% | 0.62% | ₹3,017Cr |
| 12 | Nippon India US Equity Opportunities Fund Nippon India | ★★★★☆ | +15.9% | +21.2% | +12.4% | 1.30% | ₹741.03Cr |
| 13 | ICICI Prudential Healthcare Fund ICICI Prudential | ★★★★★ | +8.0% | +21.1% | +15.6% | 1.32% | — |
| 14 | Bank of India Manufacturing & Infrastructure Fund Bank of India | ★★★★☆ | +16.8% | +21.0% | +20.4% | 0.95% | — |
| 15 | LIC MF Healthcare FundSmall fund LIC | ★★★★★ | +13.8% | +20.8% | — | 1.38% | ₹86.65Cr |
| 16 | DSP Healthcare Fund DSP | ★★★★★ | +15.6% | +20.7% | +15.2% | 0.75% | ₹3,218Cr |
| 17 | ICICI Prudential Transportation and Logistics Fund ICICI Prudential | ★★★★☆ | +3.4% | +20.3% | — | 1.26% | ₹3,013Cr |
| 18 | quant Healthcare Fund quant | ★★★★☆ | +18.7% | +20.1% | — | 1.56% | ₹363.92Cr |
| 19 | Aditya Birla Sun Life Manufacturing Equity Fund Aditya Birla Sun Life | ★★★☆☆ | +20.4% | +20.1% | +14.7% | 1.40% | ₹1,165Cr |
| 20 | Aditya Birla Sun Life Pharma and Healthcare Fund Aditya Birla Sun Life | ★★★★★ | +17.5% | +20.1% | +14.0% | 1.05% | ₹920.03Cr |
NAV data as of 05 Oct 2026. Returns are CAGR for periods ≥1 year, computed from AMFI NAV history. Ratings are WealthTicker’s own, ranked within sub-category peers — not a SEBI or agency rating. See our methodology for every formula. This is data, not investment advice.
Popular comparisons
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Understand sectoral & thematic mutual funds
Sectoral and thematic funds: high risk, high reward — or just hype?
The launch cycle is a coincident indicator of the peak, not a signal. Why concentration is the product, and the conditions under which one is defensible.
ESG funds: investing with a conscience, or paying for a label?
India's rules are stricter than most — six declared strategies and a 65% assured-BRSR-Core requirement. What that does and does not settle about greenwashing.
Infrastructure and PSU funds: riding the government capex cycle
A leveraged bet on capex and policy, with a specific trap: cyclicals look cheapest exactly when earnings have peaked, which is also when the schemes launch.
Consumption and FMCG funds: the defensive play that isn't always defensive
The steadiest earnings in the market, already priced as such — plus a rural and input-cost macro exposure most buyers of a 'defensive' fund never notice.
Banking and financial services funds: doubling a bet you already hold
Financials are already the largest sector in every diversified portfolio. Lenders book revenue years before they discover its cost — hence the dangerous cycle.
From the blog
Manufacturing funds beat infrastructure funds by 6 points
05 Oct 2026
In the year to 1 October 2026 the median manufacturing fund returned 10.44% and the median infrastructure fund 4.13%. Five industrial themes compared.
Sectoral and thematic funds: reward, risk or marketing?
02 Oct 2026
Over three years to October 2026, sector fund returns ran from −4.4% to 36% a year. Pharma funds led at a 20.8% median; technology trailed at 4.9%.
196 of 529 equity funds are down over the past year
01 Oct 2026
37% of equity funds lost money in the year to 30 September 2026: 29 of 33 large caps, but 1 of 62 mid and small caps. Which categories and themes fell.
Frequently asked questions
What are sectoral & thematic mutual funds?
Sectoral and thematic funds must keep at least 80% in the equity of one sector (banking, pharma, technology) or one theme (consumption, manufacturing, ESG). That concentration is the point and the risk: with no mandate to diversify away from the sector, the fund rises and falls with it.
Which is the best sectoral & thematic fund right now?
Nippon India Taiwan Equity Fund by Nippon India currently ranks first among sectoral & thematic mutual funds by 3-year CAGR at +62.66%. Rankings move with NAVs — past returns don't guarantee future performance.
What returns have sectoral & thematic mutual funds given?
The category has averaged +3.51% over 1 year, +13.45% annualized over 3 years, +12.26% annualized over 5 years — peer averages over the live funds in the category, computed from AMFI NAV history.
How are sectoral & thematic mutual funds taxed?
Equity taxation: gains within 1 year are short-term and taxed at 20%; beyond 1 year, long-term gains above ₹1.25 lakh a year are taxed at 12.5%.