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The Economic Times

Personal Finance / The Economic Times

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Why investing in top-performing sector funds may hurt long-term returns

Sector funds often attract investors at market peaks due to their recent sharp returns, leading to entry timing problems and lower realized returns. While sector leadership shifts and concentration increases volatility, diversified funds offer stability. Sector funds can be tactical tools but not core holdings for long-term investors.

1 Mar 2026 12:12 pm