Before exploring the themes, remember that sectoral investing works best when you understand the broader catalysts. The sectors below show strong evidence of sustained growth.

  • Banking and Financial Services: Demand for credit, digital banking adoption, and strong balance sheets continue to keep this sector stable, supporting long-term wealth creation.

  • Technology and Digital Transformation: Cloud expansion, AI adoption, and cybersecurity spending support multi-year growth.

  • Pharma and Healthcare: Rising healthcare access, specialty drugs, and medical devices push consistent performance.

  • Manufacturing and Capital Goods: Government capital expenditure, PLI expansion, and clean energy goals make this a strong theme for 2026.

  • Energy and Infrastructure: Power demand, renewables, and grid upgrades continue to accelerate.

Sectoral Fund Breakdown and Top Options for 2026

Choosing a sectoral fund drills down to comparing various categories with more clarity. 

Banking & Financials

Top funds: HDFC Banking & PSU Fund, ICICI Prudential Banking Fund, Nippon India Banking Fund
Pros: Strong long-term growth, stable credit cycle
Cons: Highly sensitive to interest rate changes

Technology

Top funds: Tata Digital India Fund, ICICI Prudential Technology Fund, SBI Technology Opportunities Fund
Pros: High innovation potential
Cons: Higher volatility during global tech slowdowns

Pharma & Healthcare

Top funds: Nippon India Pharma Fund, ICICI Prudential Pharma Fund, Kotak Healthcare Fund
Pros: Defensive during volatility
Cons: Slower returns during economic recoveries

Infrastructure & Capital Goods

Top funds: HDFC Infrastructure Fund, ICICI Prudential Infrastructure Fund
Pros: Supported by government spending
Cons: Policy-dependent returns