Sector oriented MFs (Banking & Financial Services)

Q & A Forum › Category: Financial Planning › Sector oriented MFs (Banking & Financial Services)

VIRENDER KUMAR asked 9 years ago

Hi Shree, I want to start a SIP of Rs 2000 per month in banking n financial sector for this i have short listed two funds ; ICICI Prudential Banking & Fin Serv Fund-G And Birla Sun Life Banking & Fin Serv Fund G Could you suggest which have better option , have better portfolio? Thanks Virender

3 Answers

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Sreekanth Staff answered 9 years ago

Dear Virender,
May I know if you have already invested in other MF schemes? If yes, kindly share the scheme names..
What is your investment time-frame??

VIRENDER KUMAR replied 9 years ago

Yes I am doing SIP of 2000 each in six fund since may 17 fund are Kotak Select Focus,BSL equity,Motilal oswal most focus 35,HDFC mid cap opportunity,Mirae asset emerging blue chip and Franlin India Smaller companies.
Time Horizon is 15 yaers and risj profile moderate high.
Thnax

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Sreekanth Staff answered 9 years ago

Hi, The listed funds are good ones. Kindly note that most of these schemes may already have higher allocation to banking/fin service sector (kindly check their portfolios), hence it may not be really beneficial to add a sector based fund. Suggested readings : https://www.relakhs.com/best-mutual-fund-scheme-risk-ratios/ https://www.relakhs.com/mutual-fund-portfolio-overlap-comparison-tools/

VIRENDER KUMAR replied 9 years ago

Thanks for valuable advice and may i know whats your opinion about Pharma Sector’s fund? Because since 2-3 years this sector is under performing and stock are under valued,Is it right time to invest in this sector or should wait little more,if yes than please suggest some fund.
Thanking you

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Sreekanth Staff answered 9 years ago

Hi, To be frank, I am not a great fan of Sector oriented funds. Most of the sectors can be cyclical in nature and we may have to be very careful with timing our investments and they are associated with higher risks. Generally, it has been observed that when markets are raising and over-valued, pharma/FMCG sectors generally under-perform when compared to other sectors, they may perform well in a downward market trend, they are often considered as contra bets.