Is it right decision to invest in this fund?Asked
A sector fund is a mutual fund which invests in stocks of companies that operate in a particular industry or sector of the economy like Banking funds, Pharma funds, FMCG funds, etc.
Characteristics of a sector fund:
Key points for L&T Infrastructure Fund is:
L&T Infrastructure Fund is among the best sector fund available in market and with the make in India initiative by Indian Government, this sector bound to grow in future. But, if you are looking to start investing from long term, sector funds are not a good choice as their performance vary a lot. Sector performance depends a lot on macro factors specific to that sector like in infra government push is a big factor for infra sector to perform.
Some other good sector fund options are:
L&T Infra is infra sector focussed mutual fund that invest in shares of companies in infra sector.
If you are looking to bet on infra sector considering government's push towards infra, L&T Infra is one of the best mutual fund in infra sector mutual funds.
L&T being an infra company understands this sector very well and hence its able to invest good companies in this sector.
Overall, if you are looking to start investing fro long term, sector funds are not a good choice as their performance vary a lot. Sector performance depends a lot on macro factors specific to that sector like in infra government push is a big factor for infra sector to perform.
This is a sector fund - and hence carry sectoral risk. You can decide to invest if you understand the risk of the sector. The fund is good otherwise based on its past performance.
Sector funds carry risk of the particular sector. They are not diversified across multiple sectors. This particular funds invest in infrastructure related companies. Example of such companies - Larsen & Toubro, Cummins India Ltd etc
"The scheme seeks to generate capital appreciation by investing predominantly in equity and equity related instruments of companies in the infrastructure sector."