The Mutual Fund Show: Invest In Thematic Funds After Gaining Knowledge, Say Experts

As markets touch a new high for the second consecutive session, experts advise that only knowledgeable investors with experience should invest in specific sectors or thematic funds that have fared well during gains.

"There are phases where some thematic sectors will do well, and we are in that phase, and I strongly believe that even in the coming year we will remain in the phase where certain themes and sectors will continue to do well," said Hemant Rustagi, chief executive officer, Wiseinvest Pvt.

However, he advised to look at suitability before investing in the funds.

If you know that during that period the sector will outperform, then you can invest, but you need to exit the theme as soon as it has played out, Pankaj Mathpal, founder and chief executive officer of Optima Money Managers, told NDTV Profit.

While the focused approach is good for investors, it could also be a risky approach, because if something went against the sector the stocks would crash, he said.

It is important to understand "risk profile" and then invest in such sector specific funds, according to Rustagi. If one does decide to invest, then the investment must be limited to 5-10%, he said.

Both recommend defence and infrastructure sectors, with HDFC Defence Fund and Nippon India Power And Infra Fund being among their top picks.

Mathpal also leaned towards manufacturing, suggesting ICICI Prudential Manufacturing Fund. While, Rustagi's also has PSU as his pick, with Aditya Birla Sun Life PSU Equity Fund being a recommendation in the sector.

Watch the full conversation here: