In India, the Technology sector is undergoing rapid evolution and is changing the shape of Indian business standards. Some of India’s leading IT firms are Infosys, TCS, Wipro, Tech Mahindra, etc., that have immensely created a mark in this sector.
Also the Indian government has been spending a lot of money for converting India into digital India, and it will continue to do so for next two to three years. Most of the new tech companies, along with old ones, are benefiting out of it. Investors who are planning to invest in Indian technology sector, must look into sector mutual funds that invest directly to these exponentially growing companies.
Let us look into the best 3 technology sector fund available in market for 2019.
Top 3 Technology sector funds
Technology sector funds are equity oriented mutual funds that invest in companies that are involved in technological businesses, such as manufacturers producing computer software, computer hardware, or electronics & technological service industry companies, such as those providing information technology, etc
1. Tata Digital India Fund
This fund is relatively newest in technology sector fund category but has certainly made its mark with its splendid return over past 1 year. No doubt that this fund is currently most in demand in technology sector fund category.
Here is the key information of this fund:
| Launch Date | 28 December 2015 |
| NAV (22 June 2018) | ₹14.6 |
| Plan Type | Direct |
| Rating by Groww | 1 Star |
| AUM (Fund Size) | ₹166 Cr |
| Riskometer | High |
| Minimum SIP | ₹500 |
| Minimum SWP | ₹500 |
| Performance w.r.t its Benchmark | Has consistently outperformed its benchmark S&P BSE IT since its launch. |
| Age of the fund | 2 years old |
| Expense Ratio | 1.39% |
| Exit Load | If redeemed between 0 Month to 3 Month; Exit Load is 0.25%; |
| Type | Open Ended |
Returns per annum over the years from this fund are:
| Duration | Returns |
| 1 year | 50.3% |
| 3 years | NA |
| 5 years | NA |
| Since launch | 14.50% |
Investment Objective:
The investment objective of this scheme is to seek long-term capital appreciation by investing at-least 80% of its net assets in equity/equity related instruments of the companies in Information Technology Sector in India.
However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved.The Scheme does not assure or guarantee any returns.
Holding Analysis:
2. ICICI Prudential Technology Fund
One of the oldest technology sector fund available in market. This fund has lived up to the expectation of investors over the past years and is one of the most popular in category.
Here is the key information of this fund:
| Launch Date | 01 January 2013 |
| NAV (22 June 2018) | ₹57 |
| Plan Type | Direct |
| Rating by Groww | 3 Star |
| AUM (Fund Size) | ₹372 Cr |
| Riskometer | Moderately High |
| Minimum SIP | ₹1,000 |
| Minimum SWP | ₹500 |
| Performance w.r.t its Benchmark | Has consistently outperformed its benchmark S&P BSE IT TRI since its launch. |
| Age of the fund | 5 years old |
| Expense Ratio | 1.70% |
| Exit | f redeemed bet. 0 Year to 1 Year; Exit Load is 1%; |
| Type | Open Ended |
Returns per annum over the years from this fund are:
| Duration | Returns |
| 1 year | 37.6% |
| 3 years | 11.8% |
| 5 years | 23.4% |
| Since launch | 9.71% |
Investment Objective:
The scheme will seek long-term capital appreciation by investing in equity and equity related securities of technology and technology dependent companies. A large share of the AUM will be invested in the stocks under the Benchmark Index, however, the scheme may also invest in other companies which form a part of Information Technology Services Industry.
Holding Analysis:
3. Franklin Infotech Fund
This is another popular fund in technology sector fund category but its past 3 years return is below benchmark and also has the highest expense ratio in the category.
Here is the key information of this fund:
| Launch Date | 01 January 2013 |
| NAV (22 June 2018) | ₹142.6 |
| Plan Type | Direct |
| Rating by Groww | 3 Star |
| AUM (Fund Size) | ₹210 Cr |
| Riskometer | Moderately High |
| Minimum SIP | ₹500 |
| Minimum SWP | ₹1,000 |
| Performance w.r.t its Benchmark | Has not consistently outperformed its benchmark S&P BSE Teck since its launch. |
| Age of the fund | 5 years old |
| Expense Ratio | 2.30% |
| Exit Load | If redeemed bet. 0 Year to 1 Year; Exit Load is 1%; |
| Type | Open Ended |
Returns per annum over the years from this fund are:
| Duration | Returns |
| 1 year | 20.4% |
| 3 years | 5.2% |
| 5 years | 15.6% |
| Since launch | 18.77% |
Investment Objective:
The scheme seeks above normal capital appreciation through investments in high quality, fast growing companies in the information technology sector. The Fund will Follow a bottom-up approach to stock pricing.
Holding Analysis:
Things to Remember
Investors who are planning to invest in technology funds must closely watch the funds past 3 to 5 years’ performances. Being a sector-specific fund, these funds also tend to be volatile.
so, sectoral mutual funds or mutual fund schemes that invest in specific sectors or themes are recommended only to highly informed investors. These schemes are notorious for going through highly-rewarding phases, followed by prolonged rough patches
Along with this, there are a lot of factors you should look into before selecting a mutual fund scheme which will match your investment goals. Following the few important things you should always remember before investing in Mutual Funds :
- Higher rates: Don’t blindly invest in the fund with the highest returns. Invest based on the duration you want to invest for.
- Every person’s financial condition is different. Evaluate the funds you invest in yourself – don’t invest in a fund because of its popularity.
- Equity oriented mutual fund are best for long-term investment tenure and through Systematic Investment Plan (SIP). SIP is much better and safer option for investing in equity oriented mutual funds.
- Direct plan for mutual fund gives you higher returns as compared to the regular plan of mutual fund schemes.
- STP route is best for all those investors who wish to invest a lump sum in mutual fund schemes because this way they get the dual benefits of comparative risk investment.
- Review your investment from time to time but not too often. Once a few weeks is good enough.
Also, there are many myths and false beliefs about mutual funds circulating in the markets from time to time. The most successful investors are the ones that ignore the myths and pay attention only to what actually needs their attention.
Investing in mutual funds online is very simple and paperless. Simply log in to your Groww account, choose a fund, and invest using net banking – exactly like you would when shopping online.
To look at some of the best performing funds from every category of mutual funds, check out Groww 30: Top funds in every mutual fund category.
Happy Investing!
Disclaimer: the views expressed here are of the author and do not reflect those of Groww.
Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
