The IT sector has been gaining reputation in current instances – particularly with the adoption of digital and cloud technologies due to the pandemic. Industry specialists say this trend is probably to continue more than the next couple of years.
Experts say, one of the benefits of investing in these mutual funds is that one can acquire access and exposure to different technologies stocks in just one fund.
Chintan Haria, Head- Product Development and Strategy, ICICI Prudential AMC, says, “Technologies such as cloud computing and data analytics are offering new opportunities due to which, the IT sector is likely to be on a growth path as technology spends would continue to gain share for every corporate.”
Additionally, digital technologies adoption has penetrated just about just about every sector. Hence, specialists say investors could look at this sector for investment. Individuals, with an investment horizon of a minimum of 3-5 years must invest in this sector, as this theme is probably to develop in the close to term which is a positive for the sector.
What are the different strategies of investing in the sector?
Direct investing, specialists say is one of the best alternatives to invest in the technologies sector. Having mentioned that, note that direct investing includes substantial stock-particular threat. Another way of investing consists of investing via sector or thematic funds exactly where the threat is diversified, and the stock choice is carried out by skilled fund managers.
Haria, of ICICI Prudential AMC, says “Investors can also invest through IT ETFs such as ICICI Prudential IT ETF which tracks Nifty IT TRI index consisting of almost all the major players in the country.”
Factors to be regarded although investing in IT ETFs
ETFs, combine the trading flexibility of a stock with the diversification and low fees of a mutual fund. Among the things to take into consideration although investing in ETFs is higher tracking record, liquidity, reduce tracking error, low expense ratio.
Haria adds, “Through ETFs, an investor can invest in a basket of stocks at a fraction of cost and is relatively better placed when compared to direct investing.”