Essentially, they are equity-funds which invest their entire portfolio in stocks of a particular sector. For instance, pharma funds invest only in stocks of the pharmaceutical industry. While they may have a diversified equity portfolio, they are riskier than a plain-vanilla equity fund that diversifies investments across sectors.
Muthukumar KMuthukumar K has been writing extensively on personal finance for the last two decades. He is often seen in a blissful state sparked off by Heartfulness Meditation.