IT funds flavour of the season, but investors need to time entry, exit well

Only savvy investors who are well informed about the sector's prospects should invest in technology funds

The Nifty Information Technology (IT) index, year-to-date, has risen 21.09 per cent compared to the Nifty 50’s modest rise of 2.27 per cent. Technology funds have given an average return of 19.05 per cent over this period. Over the past one year, the Nifty IT index has run up a staggering 38.31 per cent. Technology funds have outshone the index with an average return of 39.40 per cent. 

A key reason for the run-up in the IT sector is improved outlook for the companies within it. “The outlook for technology-related spend in the US and other advanced markets has improved