With expense and tax positive aspects, supportive government policies, availability of skilled workforce and technological improvement contributed to the development of the IT sector, details technologies stocks have been a true game-changer for Indian investors in current instances.
Having mentioned so, some advisers think there is nevertheless scope for additional development in the IT sector which calls for the tapping of numerous sectors to make sure it reaches its development possible. “Given the current situation and the new normal which involves using technology and digitalisation to work from anywhere on the go, the IT sector is poised to grow in the years to come,” says Prashant Joshi, Co-founder and Partner, Fintrust Advisors.
Chintan Haria, Head- Product Development and Strategy, ICICI Prudential AMC, says “The Indian software industry is forecasted to cross the $100 Billion mark by 2025. Our dependence on IT for basic necessities of life is constantly growing and everlasting. Disruptive technologies such as cloud computing and data analytics are offering new windows of opportunities for Indian companies.” Furthermore, Indian IT businesses are comparatively low-cost when compared to the US, creating the Indian IT market place pretty eye-catching.
Haria adds, “In view of all these, we believe, the optimal approach for an investor looking to participate in the growth of the India IT space can consider investing through an IT ETF that replicates the Nifty IT index which covers the top 10 listed IT players in the country.”
Decadal low-interest prices and the equity market place crash in March created equities incredibly eye-catching drawing an whole array of investors. Experts say, with markets reaching an all-time higher, direct investing also saw a surge with a record of more than 10 million new Demat accounts opening in the initially 10 months of FY21. However, Joshi of Fintrust Advisors says, “taking learnings from the past we must say that spectacular rises can have breath-taking falls, and it can catapult any market into oblivion. And it is where the gullible investors are caught unawares losing the most.”
Hence, authorities assistance, whilst retail investors ought to participate in the market place, they ought to not let feelings and random stock suggestions rule their investing choices. Rather, to ride the market place, one ought to invest by way of mutual funds or possibly ETFs which give diversification added benefits and superior threat-adjusted returns eliminating any type of emotional bias and stock-distinct dangers, the pitfalls of direct investing.
Joshi says, “Thematic ETFs can also be considered by the investors having adequate knowledge and awareness of specific sectors.” There are quite a few well known thematic ETFs readily available in India based on sectors like IT, banking, and other sectors as effectively. He additional adds, “COVID has made the IT sector in specific extremely lucrative on the back of strong need for digitalisation of every aspect of a business and to make the business future-ready.”