P.S. Subramanyam chairman, Unit Trust of India (UTI) certainly believes so. And his crystal ball reveals that infotech stocks will rule for the next 7-8 years.

The UTI chairman is of the opinion that the technicals warrant a recovery. He believes that the IT sector will hog the limelight for at least 7-8 years, with old economy stocks are also rebounding. He cited dividend tax (imposed in the latest budget) as a reason for the depressed state of equity markets.

So what does that mean for the mutual fund industry? Over the short term (2-3 months) any guesses on the state of the industry could prove hazardous given the volatility in the markets. Over the long term (12 months), one can say with a fair degree of certainty that the IT/convergence sectors will outperform other sectors, which will translate into significant gains for IT funds. So is this the right time to enter IT funds? A little patience could do investors some good.

Open Ended Schemes	NAV (Rs)	last week	Last month	Since Inception
Alliance New Millennium Fund (Gr)	9.1	-17.3%	-38.0%	-40.5%
Birla IT Fund (Gr)	22.2	-13.9%	-32.3%	18.3%
IL&FS eCOM Fund (Gr)	7.35	-19.5%	-39.6%	-46.1%
Pru ICICI Tech. Fund (Gr)	6.9	-18.1%	-29.9%	-29.9%
Magnum Sector Funds - IT	17.93	-20.9%	-38.3%	151.3%
Sun F & C Emerging Tech. (Gr)	7.54	-7.6%	0.0%	-11.9%
Tata IT Sector Fund	12.91	-16.5%	-33.0%	29.4%

Add Comments