I have SIP investments in Tata Infrastructure since August 2009 and currently hold 1139 units. Should I continue investing or switch over to some new scrip?
-Madan Verma
Tata Infrastructure fund invests in companies in the infrastructure sector. It is advisable to invest in a sector fund only when you have a well diversified portfolio and need exposure to a sector that is not well represented in your overall portfolio allocation. Investing in sector funds is risky because of the narrow investment principle that these funds follow. It is for this reason that we feel it is better to invest in lump sum than through SIPs in such funds and track the fund performance regularly because such investments depend on policies and economic cycles that favour them. The infrastructure sector as not done that well in recent years which is reflected in the way the fund has fared in this time period with -0.05 per cent returns in the past three years, you will be better of investing in broad diversified equity funds such as ICICI Prudential Focused Bluechip Equity or Franklin India Bluechip which are highly rated large-cap funds.
This article was originally published on August 31, 2011.
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