Sector allocation is the percentage of a mutual fund's portfolio invested in each industry sector — comparing it against the benchmark reveals the fund manager's active bets.
Sector allocation shows how a fund's investments are distributed across SEBI-defined sectors: BFSI (Banking, Financial Services, Insurance), IT, Healthcare, Consumer Goods, Energy, Industrials, Materials, Telecom, Utilities, and Real Estate. The benchmark index (e.g., Nifty 50) has its own sector weights. When a fund's sector weight significantly differs from the benchmark weight, the fund manager is making an active sector bet — overweighting (more than benchmark) if bullish, underweighting (less than benchmark) if bearish.
Sector allocation is the fund's 'bet distribution map' across industries. If the Nifty 50 has 35% in BFSI (banks, NBFCs) but your fund has 42% in BFSI, your fund manager is betting heavily on financial services stocks. If something goes wrong in banking (NPA crisis, rate shock), your fund will be hit harder than the benchmark. Sector allocation is disclosed monthly in factsheets — a quarterly review reveals whether the manager is taking consistent or changing sector bets.
Read the sector allocation table in the fund's monthly factsheet.
Compare to benchmark sector weights (available on NSE/BSE).
Active weight = Fund sector % − Benchmark sector %.
Positive active weight = overweight (bullish on that sector).
Negative active weight = underweight (neutral or bearish).