New Delhi, March 14 -- Shyam Prakash Jain, Ajmer, Rajasthan

Before we understand what are manufacturing mutual funds we should first understand what are sectoral mutual funds. Sectoral mutual funds are a type of equity mutual fund that invests in a specific sector or industry of the economy, such as banking, technology, pharma, energy, etc. These funds aim to capitalise on the growth potential and opportunities of a particular sector by investing in the stocks of the companies belonging to that sector.

According to SEBI guidelines, sectoral mutual funds have to invest at least 80% of their assets in equity and equity-related instruments of a particular sector. They can invest in companies of different sizes, from large-cap to mid-cap to...