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POSTED BY ON September 18, 2012 6:08 pm COMMENTS (3)
Dear All,
i’ve an excess amount of 1 lac which i’m planning to invest for a period of 1-2 years in SBI Magnum FMCG fund coz the fund has performed very well since last 5 years (1/3/5 yr – 31.9/33.85/23.86). Any suggestions… Do you think recent introduction of FDI in retail have any impact on indian FMCG players.. plz. share your thoughts..
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Thanx. Ramesh & Ashal sharing your thoughts..
Dear Roshan, the fund in question is a sectoral fund. Please ask the pain of some who had invested in Tech funds in 1998-99 or in Infra funds during good times in 2005-2006-2007.
As rightly pointed out by dear Ramesh, investing in Eq. with a 1-2Y investment term is very risky & if you are opting to invest in a sectoral fund, it’s one of the most risky investment. You may come winner eventually or a big loser at the end. Choice is yours.
Personally I ‘m unable to understand how the FDI in retail ‘ll help to increase the profitability of FMCG cos. & then this FMCG fund?
Thanks
Ashal
In general terms:
1. 1-2 years is a short frame of time, and not very suitable for equity investments.
2. Sectoral funds are riskier than well diversified funds, as the fund manager has a limited mandate in the former.
3. The sectors which has performed well in the last 5 years will not do so in the future and vice versa.
Specifics and exact future, I do not know.