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Infrastructure looks Bleak

The future of the infrastructure sector looks bleak. Stop investing in the Reliance Infrastructure fund…

I have been investing in Reliance Infrastructure fund for several months though an SIP of Rs 500 and accumulated 1,872 units. I want your views on continuing with this investment or should I switch to some other fund?
-Ravi Jaiswal

Between 2007 and 2008, the infrastructure sector was at its peak and you may have invested in this fund because you believed in the theme. However, since then the sector has lost favour and its outlook is bleak. It is advisable to invest in a sector fund only when you have a well-diversified portfolio and that sector is not well represented in your overall portfolio allocation. Compared to broad diversified equity funds, investing in sector funds is risky because of the narrow investment principle that these funds follow. Hence, we would recommend that you sell your infrastructure fund investments, cut your losses and select a broad diversified equity fund from the Fund Select feature on our website and then invest.

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