Is the sharp market shift towards infotech stocks healthy? Will this trend continue?
The shift is justified. The infotech sector is emerging as the key driver of competitive advantage for companies. What’s more, it has huge growth potential. A skilled and cost-competitive workforce gives Indian technology companies an edge over their global counterparts. The government, too, has identified technology as a growth area. More incentives for the sector are expected, which will drive growth — and valuations. What returns should investors expect from mutual funds? Return expectations would depend on the fund an investor has picked, and hence, the risk he is willing to take. Mutual funds can be broadly classified into equity funds, balanced funds and debt funds. Of the three, debt funds are the least risky. Returns from them currently average between 10 per cent and 12 per cent. Their main objective is to preserve capital and beat inflation. By comparison, equity funds are more volatile and risky in the short term, but give good returns in the long term. Also, the compoundin
