ICICI Prudential Technology Fund offered 77% returns in this year. Out of the total eight IT schemes that have completed a year of existence, seven have offered more than 60% returns in 2021. One scheme Franklin India Technology Fund has given a return of 40%. S&P BSE IT TRI, the benchmark index, offered 58% in 2021.
IT funds: Here’s how they fared year-to-date
- ICICI Prudential Technology Fund: 77.05%
- Tata Digital India Fund: 76.63%
- ABSL Digital India Fund: 71.89%
- SBI Technology Opportunities Fund: 68.29%
- SBI ETF IT: 61.85%
- Nippon India ETF Nifty IT: 61.71%
- ICICI Prudential IT ETF: 61.49%
- Franklin India Technology Fund: 39.74%
Source: Value Research
Many investors, especially the new ones, are flocking to invest in IT schemes because of the astounding returns given by these schemes in the recent past. The IT sector has been in focus ever since the Covid-19 pandemic has threatened economies around the world. However, investors should not place their investment decisions on past performance. As they say in the disclaimer, past performance does not guarantee future returns.
We generally do not recommend investing in any sector funds to our readers. We believe that regular investors would find it difficult to keep track of any sector. They also will not be able to time their entry and exit in these schemes. Timing is essential to maximise returns from sector funds.
We believe that investors should take such bets only through flexi cap funds. A good flexi cap fund manager would take informed bets on performing sectors or sectors that have good prospects. Flexi cap funds have the freedom to invest across market capitalisations and sectors.
“Be it 2022 or any other year, investment ideas for investors should be strictly based on their goals, risk profile, time horizon and asset allocation. Given the strong upwards rally we have seen in equities after the sharp downwards correction in 2020, investors should be cautious from the price and valuations perspective in 2022. Don’t take extra risk for extra returns,” says Rushabh Desai, Founder, Rupee With Rushabh Investment Services.
If you want to read more, here is another article:
Aggressive or cautious: what should mutual fund investors do in 2022?