Should a retiree invest in a technology fund?

Is investing in a technology fund or any other sectoral fund suitable for a retiree? To answer that, let's first understand sectoral funds and their nature. A sectoral fund is an equity fund that invests in companies that belong to the same sector. For example, a technology fund would invest in technology companies only. Likewise, there are different funds concentrating on particular sectors like banking, pharma, infrastructure and so on. These funds are mandated to invest at least 80 per cent of their portfolio in the chosen sector. This means that a technology fund will have to mandatorily invest at least 80 per cent in stocks of technology companies.

This article was originally published on June 27, 2022.