Technology Funds: Hold or Exit?

Ratin DSIJ / 25 Jun 2026 / Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Letters to Editor, MF - Letter to Editor, Mutual Fund

I read your story on technology funds in the last issue of the magazine.

I read your story on technology funds in the last issue of the magazine. My investment in a technology fund has been generating negative returns even over the past five years. Should I exit the fund? - Rahul Gunjal [EasyDNNnews:PaidContentStart]

Editor Responds : Technology funds are sector-specific schemes, making them inherently more volatile and cyclical than diversified Equity Funds. In recent years, Indian IT companies have faced challenges from subdued global demand, reduced discretionary technology spending, delayed client decision-making, and uncertainty surrounding the impact of artificial intelligence on traditional IT services. As a result, technology funds have delivered muted returns. However, AI is also creating new growth opportunities, with leading Indian IT firms investing heavily in AI-driven solutions and digital transformation. Before exiting, assess whether the fund has consistently underperformed its benchmark and peers and whether it still aligns with your investment objectives. If the underperformance is persistent or your portfolio is overly concentrated in one sector, gradually shifting to a diversified equity fund may be a prudent approach rather than making a hasty decision.

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