Ch.5 · SID, SAI and KIM Documents · medium
What is 'concentration risk' as a scheme-specific risk factor disclosed in the SID of sectoral/thematic funds?
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EXPLANATION
Concentration risk in sectoral/thematic funds arises because the portfolio is heavily exposed to one sector or theme. If that sector underperforms (e.g., IT sector during a tech downturn), the fund's NAV can fall sharply. This risk is higher than in diversified funds and must be prominently disclosed in the SID.
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