IT Sector Mutual Fund Delivered 20% Returns in 3 Months: Should You Invest
Today’s trending headline says the IT Sector Mutual Fund has made an impressive 26.28% return over the past 1 year, outperforming its benchmark -NIFTY IT TRI with a 21.59% return. It rewarded investors for its ability to generate high returns. The India's IT sector is growing rapidly because of increased workflows government support and global demand, such IT companies are Infosys, TATA, Wipro, HCL technologies, etc. In light of this, investors have a fantastic long term opportunity to profit from its fast growth. India is a popular destination for investment. Let's explore how much more growth potential it has to offer.
Best Investment Opportunity in India's IT Sector
IT sector's main goal is to provide investors with long term growth opportunities, and the coverage of the theme is quite big. There are three main sectors:
1. IT & related services
So IT & related services mainly include services like software development, etc., but now also the value chain has increased and the coverage of services like business process management, consulting, AI, ML, Cyber security, and, and BPO has increased. And all these services are outsourced to India. Apart from this, the biggest growth area right now is engineering & research and development services. Because most companies in every industry are doing product innovation, hence this service is developing rapidly. So our comparison also remains that which companies have a higher ER&D portfolio. e.g., KPIT, Zen Technologies, etc.
2. Digitalization Segment
Then let us talk about the second digitalization segment, which is growing in telecom, cloud storage, robotics, and the most important internet platform, every company wants to digitalize its business. Therefore, future growth opportunities in SBME are very high.
3. Manufacturing
The last section is about electronics manufacturing services. Well, till now, India was a little behind in the segment, but now it is also growing very fast. Such as IT hardware, smart devices, IOT, and now semi-conductor manufacturing has also started.
By looking at these areas, you can also estimate how much the value chain of the IT sector has grown and how much investment opportunity is there.
When you search all at once, this can be found in readymade Mutual Funds with the best strategy and a portfolio of the best quality companies, only we have to identify which fund can create good returns for us in the long term.
Top 5 IT Sector Mutual Funds to Invest in
| Fund Name | Launch Date | AUM (Crores) | Since Inception (CAGR) |
|---|---|---|---|
| ICICI Prudential Technology Fund | 03-03-2000 | 13,422.37 | 13.2% |
| SBI Technology Opportunity Fund | 01-01-2013 | 4,206.13 | 21.1% |
| TATA Digital India Fund | 05-12-2015 | 11,377.33 | 20.8% |
| Franklin India Technology Fund | 22-08-1998 | 1,774.27 | 19.74% |
| Quant Teck Fund | 11-09-2023 | 355.97 | 39.67% |
1. ICICI Prudential Technology Fund
This Fund was announced to investors on March 3, 2000, It also has an amazing asset under management (AUM) of Rs. 13,422.37 crores. The USP of the ICICI tech fund is that it invests in the tech leader’s companies, which have strong R&D development and hold top positions in the tech industry. ICICI Prudential Technology has been successful since its launch which offers investors to capitalise on the Growth of IT industry.
2. SBI Technology Opportunity Fund
The SBI Technology Opportunity Fund has a special focus on fast-growing businesses, it also provides skilled management, portfolio diversification, and a long-term capital appreciation strategy based on research.
3. TATA Digital India Fund
It was established on 05-12-2015, TATA digital India fund mainly focuses on the rising digital economy of India. As it clears by this fund name to generate long term returns. TATA Digital Fund invests in innovative technology and digital businesses.
4. Franklin India Technology Fund
The Franklin India Technology Fund focuses on high-potential technology businesses, with professional management and a research based strategy, the fund has a high-risk profile but has the potential to generate high returns because it takes advantage of the tech sector's expansion. As of 31-07-2024, the asset under management (AUM) of this fund is Rs. 1,774.27 crores.
5. Quant Teck Fund
This fund, which was created by Quant Fund House on September 11, 2023, offers clients active investing options with high volatility in the IT industry. It carries a high level of risk but also offers potential-driven rewards.
How to Start Investment in IT Sector Mutual Funds?
It's a simple process of investing in an IT sector mutual fund, here are some brief ideas:
1. Identify your goals: Understand the financial objective and risk tolerance. Do you want to invest for long term growth or short-term?
2. Research Funds: Examine the historical performance of the fund, expense ratios, and experience of fund managers.
3. Select a Fund: Pick a fund based on your investment objective and Think about things like the historical performance of the fund and diversification of the portfolio, which helps you to mitigate risks.
4. Create an account: you can open an account with an online platform or contact an expert to guide you with the mutual fund investment.
5. Start Your Investment: You have two ways of investing. The first is lumpsum and a SIP (systematic investment plan).
6. Keep an Eye on your Investment: Track your fund performance and make changes if needed. But don't make changes frequently based on the fluctuation of the market.
7. Stay Updated: Stay informed with the new trends of IT sectors and market news to have complete knowledge of your investment.
These steps will help you to start investing in IT sector Mutual Funds and also to achieve your financial objectives.
Nutshell of The Blog
To conclude, since the IT sector, Mutual Funds launched it has outperformed their benchmarks and provided investors exceptional returns through their best schemes. This category is designed for investors who are prepared to take on more risk and invest for at least 5–7 years to generate huge potential profits. The IT sector is a fast-growing business, so investing in this fund is a simple process, and last one is if you invest with a systematic investment plan (SIP) it will provide a disciplined investment with high potential long-term returns. Add this fund to your portfolio for expansion in the IT industry.
Read Our Latest Blogs on Mutual funds SIPs
1. Consumption Mutual Fund: An Emerging Investment Opportunity in 2024
2. 5 Best SIPs Plan to Secure Your Family's Financial Future
.webp)