A sectoral fund is an equity fund that invests the money of investors in businesses belonging to the same industry or sector. These funds let investors take exposure in specific sectors of the economy by putting all their money in companies of the same sector.

Sectoral funds work by investing their entire money in stocks of companies that are in the same sector. Sectoral funds invest in companies of all sizes from large-cap to mid-cap to small-cap; but the only mandate is that they should belong to the same sector. Some advantages of sectoral funds include the potential for high returns if the chosen sector performs well and the opportunity for tactical allocation.

Investors who are comfortable with taking high risks and are well-informed and active should consider investing in sectoral funds. However, before investing, it is important to consider investment goals, risks, exposure limits, and taxation. It's also crucial to choose the right sectoral mutual fund.

ET Money provides a platform for easy investment in sectoral funds. To invest, users can download the ET Money app or visit etmoney.com/mutual-funds/equity and choose the sector they're interested in. They can then enter the amount and mode of investment, provide basic details like PAN and Bank Details, and complete the investment process.

It's important to stay informed about market trends and seek professional advice before making any investment decisions. For more information and resources on mutual funds, loans, NPS, insurance, fixed deposits, income tax, and personal finance, visit ET Money's website.