Best Sectoral & Thematic Mutual Funds
Equity funds invest mainly in company shares. They carry the highest growth potential over long horizons and the largest short-term swings, so they suit goals several years away.
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 20 Aug 2026, Nippon India Taiwan Equity Fund (Direct plan, Growth option) leads sectoral & thematic mutual funds on 3-year CAGR at +59.09%, followed by HDFC Defence Fund at +41.54% and HDFC Transportation and Logistics Fund at +28.42%. Across 252 sectoral & thematic mutual funds the category averaged +17.19% over three years, at an average expense ratio of 1.24%. 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 | ★★★★☆ | +148.4% | +59.1% | — | 1.13% | ₹1,110Cr |
| 2 | HDFC Defence Fund HDFC | ★★★★☆ | +32.7% | +41.5% | — | 0.89% | ₹9,371Cr |
| 3 | HDFC Transportation and Logistics Fund HDFC | ★★★★★ | +18.9% | +28.4% | — | 1.07% | ₹1,685Cr |
| 4 | LIC MF Infrastructure Fund LIC | ★★★☆☆ | +15.2% | +26.7% | +24.2% | 1.34% | ₹1,062Cr |
| 5 | ICICI Prudential Transportation and Logistics Fund ICICI Prudential | ★★★★☆ | +18.4% | +26.4% | — | 1.21% | ₹3,013Cr |
| 6 | Bank of India Manufacturing & Infrastructure Fund Bank of India | ★★★★☆ | +22.0% | +25.1% | +22.8% | 1.03% | ₹893.08Cr |
| 7 | SBI Healthcare Opportunities Fund SBI | ★★★★★ | +20.1% | +24.5% | +19.4% | 1.02% | ₹4,319Cr |
| 8 | UTI - Healthcare Fund UTI | ★★★★☆ | +16.4% | +24.3% | +16.8% | 1.27% | ₹1,181Cr |
| 9 | SBI PSU Fund SBI | ★★★☆☆ | +10.5% | +24.2% | +25.6% | 0.86% | ₹6,480Cr |
| 10 | Aditya Birla Sun Life PSU Equity Fund Aditya Birla Sun Life | ★★★★☆ | +13.7% | +24.2% | +25.5% | 0.71% | ₹5,925Cr |
| 11 | Franklin Asian Equity Fund Franklin Templeton | ★★★☆☆ | +44.9% | +24.2% | +10.5% | 1.61% | ₹720.84Cr |
| 12 | ICICI Prudential PSU Equity Fund ICICI Prudential | ★★★★☆ | +9.2% | +23.9% | — | 1.28% | ₹1,922Cr |
| 13 | quant BFSI Fund quant | ★★★★☆ | +17.0% | +23.8% | — | 1.90% | ₹767.76Cr |
| 14 | Aditya Birla Sun Life Manufacturing Equity Fund Aditya Birla Sun Life | ★★★☆☆ | +27.1% | +23.7% | +17.1% | 1.43% | ₹1,165Cr |
| 15 | Invesco India PSU Equity Fund Invesco | ★★★☆☆ | +7.3% | +23.4% | +23.5% | 1.25% | ₹1,490Cr |
| 16 | Bandhan Transportation and Logistics Fund Bandhan | ★★★★☆ | +15.4% | +23.4% | — | 1.07% | ₹661.42Cr |
| 17 | Franklin India Opportunities Fund Franklin Templeton | ★★★★☆ | +5.9% | +23.2% | +20.2% | 0.92% | ₹8,624Cr |
| 18 | ICICI Prudential Pharma Healthcare and Diagnostics (P.H.D) Fund - Direct Plan - Cumulative ICICI Prudential | ★★★★★ | +9.0% | +23.2% | +16.9% | 1.32% | ₹6,476Cr |
| 19 | Invesco India Infrastructure Fund Invesco | ★★★☆☆ | +8.7% | +23.1% | +21.7% | 1.19% | ₹1,459Cr |
| 20 | ICICI Prudential Manufacturing Fund - Direct Plan - Cumulative ICICI Prudential | ★★★★☆ | +13.8% | +23.0% | +21.5% | 1.21% | ₹6,603Cr |
NAV data as of 20 Aug 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.
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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 get launched.
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. Lending books their revenue years before they discover its cost — which is what makes the cycle so dangerous.
Frequently asked questions
What are sectoral & thematic mutual funds?
Equity funds invest mainly in company shares. They carry the highest growth potential over long horizons and the largest short-term swings, so they suit goals several years away.
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 +59.09%. Rankings move with NAVs — past returns don't guarantee future performance.
What returns have sectoral & thematic mutual funds given?
The category has averaged +9.15% over 1 year, +17.19% annualized over 3 years, +15.07% 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%.