Motilal Oswal Private Wealth on Thursday said sector funds are not for beginners or investors who are busy and want to build a nest egg over a period of time through Systematic Investment Plans (SIPs)
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In this episode of ‘Mutual Fund Corner’, Ashish Shanker, managing director, and chief executive officer of Motilal Oswal Private Wealth, said sector funds are basically for sophisticated investors who understand sectors, who have time to do their research, or for investors or clients who work with advisors who may be better equipped to analyse the data and then suggest sector funds to their clients."
Talking about critical risks, Shanker said these funds tend to be far more volatile than their diversified counterparts.
"Also, an exit strategy from such funds is critical as a business cycle goes through phases. So one needs to time the entry and time the exit. Not getting the exit call right could lead to losing a significant portion of returns," he added.
Watch the accompanying video for more