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Mutual Funds - How different is a Sector Fund from an Equity Diversified Fund?

One of the most important differences between a Sector fund and an Equity Diversified Fund is that of 'diversification' of the underlying portfolio. A sector fund will invest in shares of companies belonging to only one particular sector of the economy. An Equity Diversified fund will invest in shares of companies belonging to all the sectors of the economy, which allows this fund type to enjoy the fruits of diversification.