Highlights

  • Sectoral funds have attracted Rs 14,000 crore in the past five months witnessing only inflow since June
  • Sectoral investment is only for well informed investors with high risk tolerance: Vishal Dhawan

Latest news

\'Mereko marwaoge\': Rohit Sharma's hilarious response to Pujara, Rahane 'retirement mistake' goes viral

\'Mereko marwaoge\': Rohit Sharma's hilarious response to Pujara, Rahane 'retirement mistake' goes viral

Trains movement hit in Punjab as farmers squat on tracks as part of Rail Roko protest

Trains movement hit in Punjab as farmers squat on tracks as part of Rail Roko protest

Karan Aujla delivers electrifying performance in Delhi-NCR

Karan Aujla delivers electrifying performance in Delhi-NCR

Russian oil spill contaminates 50km of Black Sea beaches

Russian oil spill contaminates 50km of Black Sea beaches

Two Monkeypox cases reported in Kerala

Two Monkeypox cases reported in Kerala

Congress twisted facts, distorted my statement on Ambedkar: Amit Shah

Congress twisted facts, distorted my statement on Ambedkar: Amit Shah

2 dead, 75 rescued after speed boat rams into ferry off Mumbai coast

2 dead, 75 rescued after speed boat rams into ferry off Mumbai coast

PM Modi to visit Kuwait on December 21-22

PM Modi to visit Kuwait on December 21-22

Invest Smart: Everything you need to know about sectoral funds before investing

Vishal Dhawan, Founder and CEO of Plan Ahead Wealth Advisors sheds light on the risk factors of Sectoral funds and says this investment is only for well informed investors with high risk tolerance

Invest Smart: Everything you need to know about sectoral funds before investing

Sectoral/thematic funds have been gaining popularity among investors of late. Over the past five months, this category has attracted Rs 14,000 crore. There has been a regular inflow since June.

In this episode of Invest Smart, Vishal Dhawan, Founder and CEO of Plan Ahead Wealth Advisors sheds light on the risk factors, and everything you should know about these funds before investing in them.

Thematic Funds

Dhawan says that whenever the stock markets do well, thematic funds tend to become popular and hence the investors should be well aware of why they are buying a particular theme or sector. Investors should be aware of their own skills and risk tolerance while making the investment decision.

Pros and Cons of thematic funds

The biggest advantage of investment in thematic funds, according to Dhawan, is that it will give a better return compared to an investment made in a stock from the same sector.

Dhawan who emphasised on getting the entry and exit to the fund right said that the worst outcome could be when an investor enters the fund during its peak and exit at its bottom.

Things to know before investing

The foremost thing to take care of is the selection of the fund. Dhawan goes on to say that one must be aware of the pricing in the sector - if it is in a premium rate or in a discounted rate. He advises that the funds should be bought when they are out of favour while projecting green shoots.

Dhawan also says that many do not pay attention to getting the portfolio weight right and tend to overload it with stocks from one particular theme

"Risk Management strategy is very important to get the (portfolio) weightage right. I think not enough people pay attention to this when they are constructing or deciding how to weight a portfolio", says Vishal Dhawan

Who should not invest in sectoral funds

An investor should be able to figure how much exposure the portfolio already has to the sector he/she wants to invest. As per Dhawan, any investor who could make the portfolio weight disproportionate by investing in a sector should avoid sectoral funds. He adds that this investment is only for well informed investors with high risk tolerance.

ADVERTISEMENT

Up Next

Invest Smart: Everything you need to know about sectoral funds before investing

Invest Smart: Everything you need to know about sectoral funds before investing

Parliamentary Panel bats for legal guarantee of MSP to protect farmers' interests

Parliamentary Panel bats for legal guarantee of MSP to protect farmers' interests

Bihar fully prepared to create robust business ecosystem, investment safe: Dy CM Samrat Choudhary

Bihar fully prepared to create robust business ecosystem, investment safe: Dy CM Samrat Choudhary

"If they tax us, we tax them...," Trump Signals Tough Trade Stance; Reciprocal Tariffs on India

"If they tax us, we tax them...," Trump Signals Tough Trade Stance; Reciprocal Tariffs on India

Top 5 Losers of NIFTY 50: A Day of Decline for Leading Stocks

Top 5 Losers of NIFTY 50: A Day of Decline for Leading Stocks

India's renewable energy capacity addition doubled to 15 GW in Apr-Nov: Pralhad Joshi

India's renewable energy capacity addition doubled to 15 GW in Apr-Nov: Pralhad Joshi

ADVERTISEMENT

editorji-whatsApp

More videos

 Indian Markets Open Lower Amid Caution Ahead of U.S. Federal Reserve Meeting

Indian Markets Open Lower Amid Caution Ahead of U.S. Federal Reserve Meeting

Five of top-10 most valued firms together add Rs 1.13 lakh Crore in market valuation

Five of top-10 most valued firms together add Rs 1.13 lakh Crore in market valuation

Airlines are price takers, they do not have influence on prices they pay: IATA Chief Economist

Airlines are price takers, they do not have influence on prices they pay: IATA Chief Economist

India’s import of Russian oil drops in November on shrinking discounts

India’s import of Russian oil drops in November on shrinking discounts

Auto Expo to see highest-ever participation of vehicle manufacturers: SIAM

Auto Expo to see highest-ever participation of vehicle manufacturers: SIAM

Russia Eases Travel Norms for India, Visa-Free Travel Expected by 2025

Russia Eases Travel Norms for India, Visa-Free Travel Expected by 2025

Bitcoin's Rally Continues: Surpasses $106,000 on News of Trump’s Bitcoin Reserve Fund

Bitcoin's Rally Continues: Surpasses $106,000 on News of Trump’s Bitcoin Reserve Fund

Get Ready for PAN 2.0: QR Codes, Paperless Processes & More!

Get Ready for PAN 2.0: QR Codes, Paperless Processes & More!

Passenger Vehicle dispatches rise 4% in Nov as demand sustains post-festive period: SIAM

Passenger Vehicle dispatches rise 4% in Nov as demand sustains post-festive period: SIAM

Switzerland suspends MFN status to India, dividend income to face higher tax

Switzerland suspends MFN status to India, dividend income to face higher tax

Editorji Technologies Pvt. Ltd. © 2022 All Rights Reserved.