Is this the right time to invest in SBI Pharma Fund (Regular, Growth)? Will it be prudent to invest a lumpsum or should I invest via an SIP? What is the future prospect of this fund?
- Saurav Bhattacharyya
We do not recommend investing in sector funds. Over any period of time, the stock markets always favour some sector of the economy more than the others. Therefore some set of sector-specific funds are always doing better than the others. Over the last many years, the favoured sector has rotated from one to another. Also, funds manager of a sector mutual fund is forced to invest in the same sector even when the sector is not performing well. This will adversely impact the overall returns from your portfolio.
It is always better to invest your money in a staggered manner in an equity scheme. This will rule out the possibility of committing the entire money at a market peak. Investing regularly over a period will average the purchase price and enhance returns.
This article was originally published on December 22, 2015.
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