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Avoid sectoral funds

Avoid sectoral and thematic funds. Move your investments to a diversified equity fund…

I have been investing Rs 3,000 every month in ICICI Prudential Infrastructure for the past 60 months. I am very disappointed with the way the fund has been doing. Should I continue with this investment?


You should give up on this fund. We have been expecting a turnaround in the infrastructure sector, but going by the way the economy is going, the turnaround seems unlikely. Your 5-year SIP in ICICI Prudential Infrastructure fund has depreciated by nearly 6 per cent. We can't just blame the fund for performing poorly as the Infrastructure category has been in doldrums since 2008. This category delivered negative returns at 3.77 per cent over the last 5 years, and the fund delivered negative returns at 3.5 per cent.

What you have been doing right is investing regularly in equities, even through the lean times. You should continue doing that, but move your money and subsequent investments to diversified equity funds. You can invest in ICICI Prudential Focused Bluechip or ICICI Prudential Discovery fund. In future, avoid sectoral and thematic funds.

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