I am holding units in ICICI Prudential Banking and Financial Services fund. What should I do with this investment?
Manoj Pahwa, Chandigarh
Investing in sector fund is risky as these funds have a narrow investment mandate. For instance a banking sector fund predominantly invests in stocks in the banking sector and any impact on the sector directly impacts the overall performance of the fund. The performance of this fund has been good, with the fund posting 31 per cent in the past one year and 27 per cent in the past five years. Ideally, you should invest in a sector fund only when you have a fully diversified portfolio which lacks in a particular sector representation which is achieved by these funds or understand the risks associated with a sector and have the knowledge to ride the sector during highs and exit before the lows.
