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Investing in a Theme

Exit a thematic fund if you no longer believe in its prospects, but hold on if you feel the sector will do well…

I invested Rs 20,000 in Franklin India Opportunities Fund and Tata Indo Global Infrastructure Fund in 2007. Now these funds are not performing well and I am incurring losses. Please advise what I should do-exit or stay invested?
Rahul Bhattcharya

Why did you invest in the Tata Indo Global Infrastructure fund? Was it because you believed in the fortunes of the Infrastructure sector? Because you wanted some sort of global exposure to infrastructure companies? Or was it simply during the new fund offer (NFO) period and you had no real reason for investing in it? This is a thematic fund and its performance will be linked to the performance and going-ons in the Infrastructure space. If you no longer believe in the space, then exit. If you feel that it will pick up inevitably, then hold on. If you have no view, then cut your losses and exit. Franklin India Opportunities is an ‘Equity: Large & Mid Cap’ fund which has not been performing well when compared to some other funds in the same category.
A mistake you made was investing a lump sum and that too at the peak of a bull run. You could try a systematic transfer plan from this fund into Franklin India Prima Plus


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