There are a few benefits of this move, which will range from the reduction of risk to ensuring that there is a spread out of the investments. The imposition of such rules by the fund also ensures that there is a specific basis on which the entire management of the fund takes place. At the same time, the investor also has to be aware that these will come with a cost.
The cost is that there might not be a high out-performance in case the sector chosen by the fund manager does well. This will be on account of the limited exposure that will be found to a particular sector. However, this is not a certainty because good fund management can still ensure that the fund ends up benefiting the unit holders.