Dr Madam Namaskara , My daughter 14 years studying in class 9 , she is about 5 feet 9 inches weighs about 48 - 52 kgs , athletic built , plays football as a striker for school and national level and extremely active her diet intake is perfect we are pure vegetarian no eggs also, her morning starts with 10ml aloe vera juice with warm water , a small spoon of Amala + triphala + jeera powder with honey and a banana , she carries breakfast poha upma dosa idli to school which her mother makes , she eats lunch at school canteen , and when home at 3 pm she eats biscuits or some snacks or dal chawal or curd rice which she likes , night she has 4 phulkas , veg + khichdi . She does not have milk products like tea or coffee , this diet she is following since 3-4 years , but recently say since 2-3 months she is complaining if burning sensation in chest , burps and flatulence and causing her distress , my md Physician throughly examined her and concluded acidity n gas problem , he started 1 tab pan d for 5 days and she feels a lot better ,now he's asked us to continue for another 5 days and then stop , I am sure it's the school canteen food as we in the family don't experience this , what is to be done apart from stopping the school canteen food which could be a culprit please advice I am getting worried as it disturbs her .

Ans: You are looking at the IT sector after a phase of underperformance. That itself is a sensible thought process. Many quality IT companies are trading below their earlier peak valuations. Long-term opportunities may emerge if earnings growth improves.

» My Assessment On Sector-Based Investing

– An IT-focused fund is a sector fund.

– Sector funds can deliver strong returns during favourable cycles.

– But they can also remain stagnant for several years.

– Returns depend heavily on one industry.

– If global technology spending slows, performance may suffer.

– US economic growth, interest rates and technology budgets also influence results.

– Hence, sector funds carry higher risk than diversified equity funds.

» Why I Am Not A Big Fan Of Index Funds

– Index funds invest purely based on index weightage.

– No fund manager can avoid expensive stocks.

– No flexibility to move away from weak companies.

– No opportunity to increase allocation to emerging winners.

– The fund simply follows the index, whether markets are attractive or expensive.

– During market corrections, there is no active risk management.

– Investors get average market performance, not better-than-market performance.

– In concentrated sectors like IT, this limitation becomes even more important.

» Benefits Of Actively Managed Funds

– Experienced fund managers can identify future leaders early.

– They can reduce exposure to companies facing business challenges.

– They can manage sector allocation based on opportunities.

– They can maintain cash when valuations become excessive.

– They can take advantage of changing market conditions.

– Over long periods, good active funds have often created meaningful alpha over benchmarks.

» Should You Invest Now?

– If your existing portfolio already has adequate exposure to diversified equity funds, a small allocation to the IT sector may be considered.

– However, making a large investment into a single sector may not be prudent.

– For most investors, diversified actively managed equity funds remain a better core strategy.

– Sector exposure should generally remain a satellite allocation and not the foundation of wealth creation.

Regularly:

– Review your overall asset allocation first.

– Check existing exposure to technology stocks through mutual funds.

– Assess your investment horizon. Ideally 7+ years for sector funds.

– Avoid investing based on recent performance alone.

– Use staggered investments instead of deploying a large lump sum at one time.

– Keep the majority of equity allocation in diversified actively managed funds.

» Final Insights

– The IT sector may offer opportunities over the long term.

– However, a sector-based index fund carries concentration risk and lacks active management flexibility.

– For most investors, diversified actively managed equity funds remain a stronger and more balanced wealth creation option.

– If you want IT exposure, keep it limited and supplementary rather than making it a major portfolio holding.

Best Regards,

K. Ramalingam, MBA, CFP,

AMFI-Registered MFD – ARN 4188

www.holisticinvestment.in

https://www.linkedin.com/in/ramalingamcfp/