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Infra Underperformer

Reliance Infrastructure hasn't been able to perform even in the bull run that began from March 2009…

I have invested Rs 10,000 in Reliance Infrastructure Fund as part of NFO. But over the last year its performance is very poor. What should I do with this investment?
- Tapan Bansal

This fund is an infrastructure fund which invests in infrastructure companies and companies indirectly related the infrastructure sector. Infrastructure as a theme did very well during the downturn of 2008, but have been unable to match the same during the bull run which started in March 2009. This is the risk associated when investing in a sector or thematic fund, where extreme performance is expected.

The fund has lost 21 per cent in the past one year and its return since inception in June 2009 has been -6.77 per cent. It is natural that the current value of your holdings is less than what you invested in the fund. You should cut your losses in this fund and consider investing it in other funds where the opportunity to earn better exist. There are two lessons you have learnt from this investment; the risks associated with thematic and sector funds and the fact that you need to track the performance of your investment far more frequently to make changes.

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