by on February 11, 2019

Majority of the stocks of Indian companies faced negative returns in 2018 as a result equity Mutual fund investors suffered from losses of serious margin. When all the other schemes were suffering to maintain positive outcome, Tata Digital India Fund found a way to the top on the list of most profitable schemes in 2018. Experts at MySIPonline have been recommending the scheme since a long time to the potential investors as the fund possess all the qualities to be one of the best IT sectoral funds in the mutual fund industry. 

Performance of Tata Digital India Fund
The fund came out in December 2015 and faced a harsh market condition in 2016 as major IT companies faced losses. In the next few years, the fund manager strategically utilised the consistent growth in the IT sector and provided the highest returns in the category. No other scheme in the category of IT sector funds provided higher returns than Tata Digital India Fund in 2017 and 2018. Even though, the 4th quarter of 2018 was unpleasant for the fund and IT industry, the overall annual return of Tata Digital India Fund remained the highest among all the mutual funds in India.

What was the Reason?
In 2018 rising crude price, depreciation of rupee, and many other factors negatively affected every other industry. As India is one of the largest producers of IT industry, the majority of the cash inflow is in USD and due to weakness in rupee, IT companies took advantage and enjoyed remarkable growth. The trends are expected to be the same for some time which can be already seen in the returns of the last 1 month. 

Is It Safe to Invest Now?
Just because the NAV has increased drastically over the last couple of years, it doesn’t mean that it won’t grow any further. However, those investors who already achieved their investment goal can either withdraw or accumulate but new investors can still earn higher returns from the fund in the next few years.

Who Should Invest?
It sector funds are suitable for the investors who can keep an eye on the behaviour of the IT sector companies. These funds are generally suitable for the experienced investors as the performance of this fund is directly dependent on the performance of the particular sector which is associated with it. Depending on the market conditions, it might be needed to make additional purchase or redemption, hence new investors can either skip this scheme or invest through SIP for a longer duration. 

It is better to consult a financial expert before investing as these funds can possess very high risk. Investors can take suggestions from the financial experts at MySIPonline and also grab advantages of various tools available at the website regarding mutual fund investments.

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