sectoral fund

PGDBM BATCH VI2014

MODULE – II11-11-2014

PRESENTED BY ANUP TIWARI

ALOKET SETHMAYUR SRIVASTAVA

RAVIKANT MISHRAKUSHBOO JOUHARI

MOHIT SHUKLA

Objective

1. What is sectorial funds & Pros and cons ofsectorial funds.

2. What is investor profile & which profile bestsuited for sectorial funds.

3. In the current economic scenario which sectoris best in long term. We are going to suggesthealthcare and IT & ITeS sector.

Sectorial Funds

As the name implies sector of the economy, such as energy or utilities. Sector funds come in many different flavors and can vary substantially in market capitalization, investment objective (i.e. growth and/or income) and class of securities within the portfolio.

Pros of Investing in sector Funds

• Sector funds can provide diversification to a portfolio.

(For example, an analysis of your portfolio shows that you have

very little exposure to health care stocks, then a health care

sector fund can fill that gap and further diversify your

portfolio).

• Investors may look to sector funds as a way to make a big

profit over a short period of time.

Cons of Investing in sector Funds

• Sector funds are very concentrated in nature .

(When a sector of the market performs poorly, funds

that invest in that sector will also perform poorly.)

• Investors should be wary of sector fund fees.

(the portfolio manager is frequently buying and selling

securities for the portfolio. Frequent trading generates

commission costs, which detract from the portfolio’s

returns. Additionally, frequent trading may increase

the investor’s tax burden.)

1. Natural Resources Funds

2. Utility Funds

3. Real Estate Funds

4. Financial Funds

5. Healthcare Funds

6. Technology Funds

7. Communications Funds

8. Precious Metals Funds

etc.

Sector where you want to invest

Method For Drawing Up Investor Profile

Duration

How long do you want to invest for?

Returns – income or growth?

Do you want income or growth?

Liquidity

Do you need to get to your money easily?

Risk

What balance of risk and reward is right for you?

Types of Investors

Conservative investor- He is a defensive investor

Balanced investor- He is a growth investor

Aggressive investor- His objective is capital growth

Best suited profile for sectorial funds

Diversify Portfolio’s Investors Aggressive Investors Investors Who Have Knowledge Market &

Stock

Note:- We should not suggest fresher investors to invest in sectorial funds

In Current Economic Scenario Which

Sector Is Better For Long Term

Investment?

We suggest to investors to invest in

healthcare(Pharmaceuticals)

IT & ITeS sector

Healthcare sector Growth From 2008-2012

Current Economic Scenario Sector Fund would be

SECTOR FUNDS

RETURN in (%)

2nd yr 3rd yr 5th yr

Pharma & Healthcare

Reliance Pharma Fund (G) 34.8 29.9 26.7

SBI Pharma Fund (G) 39.9 36.2 28.2

UTI Pharma & Health (G) 35.1 27.8 24.5

FMCG

ICICI Pru FMCG Fund (G) 17.5 21.9 23.7

SBI FMCG Fund (G) --- --- ---

Banking & Finance

Reliance Banking Fund (G) 23.5 22.1 17.5

ICICI Pru Bkg & Fin Serv-RP(G) 28.1 27.5 18.3

GS Bank BeES --- 25.4 17.8

R*Shares Banking ETF 24.1 22.2 15.9

Technology

ICICI Pru Tech. Fund (G) NA 32.2 26.4

Franklin Infotech Fund (G) NA 20.6 19.2

Birla SL New Millennium (G) NA 21.8 14.7

DSP-BR Technology.Com -RP (G) NA 19.0 12.1

THANK YOU