Sector Concentration Risk: The fund invests exclusively in the financial sector, making it susceptible to downturns or specific challenges affecting this industry more than a diversified fund.

Interest Rate Sensitivity Risk: The profitability of many financial companies, particularly banks, is highly influenced by changes in interest rates, which can impact net interest margins or loan demand.

Economic Downturn Risk: The financial sector is highly cyclical and deeply tied to the health of the broader economy. Economic slowdowns or recessions can lead to increased loan defaults and reduced demand for financial services.