Monday, July 15

​Top 10 investment opportunities for lumpsum investment in 2023

Investing your surplus lumpsum funds wisely is a vital move, especially in 2023 as the financial vertical is constantly evolving. By understanding various categories and sectors within the market, you, as an investor can figure out promising opportunities. Discussed here is an overview of the top 10 mutual fund investment opportunities highlighting promising market sectors and categories of mutual funds.

  • Pharma sector funds

They invest in businesses engaged in drug manufacturing, research, and distribution. Though the fund categorisation within this market sector might vary, many pharma sector funds often focus on large-cap companies owing to their established market presence and stability. Such funds offer you with exposure to established pharmaceutical organisations with a proven record.

  • Technology sector funds

Technology sector funds basically have exposure to mid-cap and large-cap companies, both, allowing you to gain the benefit from well-established market leaders and promising upcoming technology firms. Such funds endow you with the opportunity to capitalise on the sector’s growth potential.

  • Financial and banking services funds

Financial and banking services sector funds serve as the backbone of any economy. Funds of this sector invest investible in non-banking financial institutions, banks, insurance companies and various financial service providers. Though the categorisation might differ, such mutual funds typically offer exposure to both well-managed mid-cap financial companies and large-cap banks for a balanced investment approach.

  • Infrastructure sector funds

Such funds concentrate on companies involved in power generation, construction, transportation, and various related activities. Note that they allocate maximum of their investments in a combination of mid-cap and large-cap stocks. So, by investing in this fund, you as an investor can benefit from the stability of well-established large-cap companies and the growth potential of specific mid-cap businesses in this sector.

  • Consumer goods sector funds

These funds invest in businesses that manufacture and distribute non-durable and essential consumer products. They usually are a combination of both mid-cap and large-cap stocks providing you with exposure to known consumer goods businesses and promising mid-sized companies. This​ ​sector offers an opportunity to tap into the country’s growing consumer spending.

  • Energy and natural resources funds

Such funds concentrate on companies that are engaged in gas and oil exploration, mining, renewable energy, and relative activities. In this sector, you can figure out funds that allocate investments in both large-cap energy organisations and mid-cap businesses with considerable growth potential. This allows you to diversify your portfolio and potentially gain benefits from the country’s expanding natural resources and energy sectors.

  • FMCG (fast-moving consumer goods) sector funds

FMCG funds basically invest in those companies involved in marketing and manufacturing of fast-moving goods. Such funds typically involve both mid-cap and large-cap stocks offering exposure to mid-sized businesses with growth prospects and established FMCG organisations with renowned brand names.

  • Dividend yield mutual funds

Such funds are formed to offer you regular income with a capital appreciation feature. They basically invest in stocks offering high dividend yields. While the categorisation might differ, dividend yield mutual funds often consist of large-cap stocks owing to their stable dividend-paying track record. So, by opting for this fund, you as an investor can benefit from the constant income streams that are generated by well-established companies with an excellent record of disseminating dividends.

  • Mid-cap and small-cap mutual funds

Such funds concentrate on investing in smaller companies with considerable growth prospects. They aim at generating higher returns owing to the presence of increased market volatility. So, if you are seeking capital growth, then you can consider investing in mid-cap and small-cap mutual funds that offer exposure to companies poised for high growth in sectors like manufacturing, healthcare, technology, etc.

  • Index mutual funds

These funds mirror the performance of a particular market index to provide you the benefitof a diversified stock portfolio. The stocks’ categorisation in an index mutual fund is based on the underlying indices that are tracked, which involve a blend of mid-cap, small-cap, or large-cap stocks.

Conclusion

Being aware of the mutual fund categories linked with every sector is important if you are one of those looking to opt for the lumpsum route in mutual funds. While funds’ categorisation might differ within sectors, specific trends are analysed such as technology and bank funds usually tend to have higher exposure to both mid-cap and large-cap stocks and pharma funds have higher exposure to large-cap stocks.

So, before zeroing in on any sector for lumpsum investment, ensure to conduct in-depth research. You may even consider consulting a financial advisor for making a well-informed investment decision in mutual fund.