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Should I invest in sectoral mutual funds, specifically investing in auto companies?

Dhirendra Kumar advises to keep it simple by avoiding sectoral bets and being regular with your investments

With the auto industry undergoing heavy correction, will it be appropriate to invest in auto sector mutual funds?
- S.K. Sharma

It has undergone correction but why do you have to buy mutual fund schemes specifically taking auto sector bets? First, there are not many auto sector funds. Besides, I would say that every diversified fund also has auto stocks. So, by investing in such a fund, you will get diversification and a certain part of it will be in auto companies. Therefore, as and when auto stocks make a comeback, you can gain benefits.

And if you think that you have a special understanding of the auto sector and the market, then why do not you buy auto stocks directly? You can consider buying one or two leading companies that you think will make a big comeback. Having said that, this is a private decision.

But for ordinary investors, they should keep it simple, diversify and not take any sectoral bet. Just be regular with your investments. Also, by investing in a fund, you have hired a fund manager to take such calls so leave it on the fund manager to emphasise something in the portfolio at the opportune time or keep away from something.