Tell me How can a Infrastrucutre Fund could be better then the Equity Diversified and Equity Tax Saver Fund?

Question

I need to know that how can we say that the Infrastrucutre Fund is good then the Equity Diverfied and Equity Tax Saver Fund?basically im doing a project on caomparative study of these above mentioned funds and i want to show that the Infrasrtucture Fund is good then the other tow that would be my findings so just wanted to know how can i prove it all the three products are of Canara Robeco Mutual Fund and the infrastructure is performing good but i still need a good reason which would suport my finding

Answer 1

hi bhusan

just by looking at the market figures no one can generalize as to which is good which is not.

TAX SAVER FUNDS-

   ADV-

    (a) helps you save taxes, eich is ovbious, you can save as much as 33% depending on your tax bracket.

     (b) as log in period is 3 years, gives ample time to the management to play around as also avoid repeated churning to give instant results.

    DIS-ADV-

      (a) lock in period can hamper your ability to come out of a fund if the market is not doing welll or if the fund itself is no doing well.

    EQ DIVERSIFIED

     ADV- helps you great extent to diversify your risk as exposar to one sector is minimal.

      DISADV- you may miss out on rally inn one perticular sector as it might not have too much weitage to increase the woth of the fund

       INFRA FUNDS- these are nothing but funds which are investing in companies involved in infra sector' these are basically called SECTOR FUNDS. they do really well when the sector is doing well but fare equally bad when the sectors dooms, its like keeping all sectors in one basket. buts its not that they are bad, a bit of these sector funds must form part of your portfolio,

RESULT- for long run eq diver are best while for short term depending on the wave sector funds are great

well i took a long time to answer did it help?

Answer 2

During certain periods of time certain specialty funds may outperform diversified funds.  There was a time not too long ago when technology funds were the outperformers 1997-2000.  Then something happened.  Technology stocks became WAY overpriced.  Then from 2000-2002 the last place in the world you wanted to be was in a technology fund.

  Over a long period of  time a diversified fund will outperform a specialty fund generally speaking, but during certain periods a specialty fund may dramatically outperform a diversified fund.

An example should illustrate the point.

Fidelity Select Electronics Fund FSELX from 1998 to 2000 increased in value over 280% but then during the next 2 years gave it all back, every cent.  It total annual return during the last 10 years has been 5.39%

T Rowe Price Capital Appreciation Fund PRWCX  a diversified fund from 1998 to 2000 increased in value only 40%, but from 2001 to 2003 it increased another 3% and over the last 10 years has had a annual return of 9.9%.