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Avoid Thematic Funds

Opt for a diversified equity fund instead of thematic & sector funds, as the latter are high on risk…

I am 27 years old and have investments in DSPBR TIGER, HDFC Top 200 and Reliance Diversified Power. I plan to invest in these for ten years. Can you suggest one more fund to invest?
- Pavan Kumar

If these are your only investments, you need to rethink your investing strategy. Of the three funds only HDFC Top 200 is a broad diversified equity fund, with an infrastructure and a thematic fund completing your portfolio. The infrastructure theme has not emerged the way it was anticipated and its prospects look bleak. Likewise, Reliance Diversified Power Sector Retail is out of favour and is heavily dependent on the fortunes of the power sector to reflect any performance. Investing in these schemes for ten years is not the best of moves and we would suggest that you take a higher investment risk by investing in broad equity diversified funds from the multi-cap and mid- and small-cap funds which you can shortlist from the Fund Select feature on our website instead of looking for investments in thematic and sector funds.




This article was originally published on August 28, 2012.

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