Don't Multiply Risk

Investing in the NFO of a thematic fund like Sundaram Energy Opportunities is extremely risky…


I had invested in the NFO of Sundaram Energy Opportunities. The fund’s NAV has never crossed the NFO price. Should I exit with loss or wait for the value to increase?
- Narasimhan S

Sundaram Energy Opportunities was launched in December 2007 with the objective to invest in companies in the energy and energy-related businesses. This was just before the markets hit their all time peak in January 2008 before the crash. This is a thematic fund, and risky because of the limited investment scope that it explores. These funds do well only when their underlying theme is the flavour of the season, however, the energy sector has not been so which is reflected in the fund’s performance, with negative returns since launch.

You should cut your losses and exit this fund, instead of missing out on several other opportunities, especially when the markets have turned around and many funds have recovered from the lows. The opportunity loss by staying invested in this fund can only add to your losses.



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