Sectoral SIP Calculator - Sector Fund Returns Calculator

Calculate your sectoral mutual fund SIP returns with our free online calculator. Plan sector-specific fund investments with accurate maturity projections.

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Enter Investment Details
₹5,000
₹500₹1,00,000
14%
8%25%
7 Years
1 Year20 Years
Investment Breakdown
Total₹7,15,126
Total Investment
₹4,20,000
Expected Returns
₹2,95,126

Total Investment

₹4,20,000

Expected Returns

₹2,95,126

Maturity Value

₹7,15,126

Investment vs Returns41.3% returns
Principal
Returns

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What is Sectoral SIP?

Sectoral SIP is a systematic investment plan in sector-specific mutual funds that invest predominantly in companies belonging to a particular industry or sector. These specialized funds focus on sectors like banking, IT, pharma, infrastructure, or consumption, allowing investors to capitalize on sector-specific growth opportunities.

Unlike diversified equity funds that spread investments across multiple sectors, sectoral funds concentrate on a single industry. This focus can lead to higher returns when the sector performs well, but also carries higher risk during sectoral downturns. Sectoral SIP helps mitigate timing risk through rupee cost averaging.

How Sectoral SIP Returns are Calculated

Sectoral SIP returns vary significantly based on sector performance. Some sectors can deliver 15-25% returns during bull phases but may underperform during unfavorable cycles.

M = P × ((1 + r)^n – 1) / r) × (1 + r)

Example Sectoral SIP Calculation

  • Monthly Investment: ₹5,000
  • Duration: 7 years
  • Expected Return: 14% p.a.
  • Total Investment: ₹4,20,000
  • Maturity Value: ₹7,25,947
  • Total Returns: ₹3,05,947

Popular Sectoral Funds in India

  • Banking & Financial Services: Invest in banks, NBFCs, insurance companies
  • IT & Technology: Focus on software, IT services, and tech companies
  • Pharma & Healthcare: Pharmaceutical, hospitals, and healthcare companies
  • Infrastructure: Construction, power, cement, and capital goods
  • Consumption: FMCG, retail, and consumer discretionary companies
  • Manufacturing: Auto, industrial, and engineering companies

Benefits of Sectoral SIP

  • High Return Potential: Can outperform diversified funds during sector rallies
  • Targeted Exposure: Allows participation in specific growth themes
  • Tactical Investing: Useful for portfolio tilts based on sector outlook
  • Expert Management: Fund managers specialize in specific sectors
  • Cycle Opportunities: SIP helps accumulate during sector downturns

Risks of Sectoral Fund Investment

  • Concentration Risk: All eggs in one sector basket
  • Cyclical Nature: Sectors go through boom and bust cycles
  • Timing Dependency: Entry and exit timing significantly impacts returns
  • Higher Volatility: More volatile than diversified equity funds
  • Regulatory Risk: Government policies can impact specific sectors
  • Not for Beginners: Requires sector knowledge and market understanding

Due to these risks, financial experts recommend limiting sectoral fund allocation to 10-15% of your total equity portfolio and investing only if you have a strong view on the sector outlook.

Frequently Asked Questions

The best sectoral fund depends on economic cycles and your outlook. Banking funds perform well in credit growth phases, IT funds during digital transformation, and pharma during health crises. Currently, banking, IT, and manufacturing sectors show long-term promise. Never invest based solely on past returns.

Yes, sectoral SIP carries higher risk than diversified equity funds due to concentration in a single sector. However, SIP reduces timing risk through rupee cost averaging. Limit sectoral allocation to 10-15% of your portfolio and ensure you understand the sector dynamics.

Financial advisors recommend allocating maximum 10-15% of your equity portfolio to sectoral funds. Start with ₹1,000-2,000 per month in 1-2 sectors you understand well. Core portfolio should remain in diversified equity or index funds.

Consider exiting when: the sector has significantly outperformed and valuations are stretched, fundamental factors affecting the sector turn negative, your investment thesis no longer holds, or you need to rebalance your portfolio. Avoid emotional decisions based on short-term volatility.

Yes, you can lose money in sectoral SIP if the sector underperforms for extended periods. During 2018-20, many infra and PSU funds gave negative returns. SIP reduces but does not eliminate risk. Always invest with a 5+ year horizon and only money you can afford to keep invested.
Disclaimer

This calculator is provided for informational purposes only. The results are estimates and should not be considered as financial advice. Actual values may vary based on various factors. Please consult a certified financial advisor before making any financial decisions.

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