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Sector & thematic funds: Investors with high risk appetite should stay put

Fund houses had earlier attracted inflows into S&T funds through new fund offers (NFOs), a strategy that is now losing traction

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Many investors enter S&T funds based solely on recent returns.

Himali Patel

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Inflows into sector and thematic (S&T) funds fell sharply from around ₹5,711.6 crore in February 2025 to about ₹170.1 crore in March 2025 — a decline of 97 per cent. With many such funds underperforming, investors need to assess whether to remain invested or exit.
 
What triggered the drop
 
The primary driver has been weak market performance. “The Nifty’s sharp fall from its peak of 26,277 in September 2024 to around 22,000 in early March 2025 spooked investors,” says VK Vijayakumar, chief investment strategist, Geojit Investments.
 
Fund houses had earlier attracted inflows into S&T funds through new fund offers (NFOs),

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