Question: In mutual fund investing, does the investor have a choice of specifying his area of preffered investments ? I am planning to invest Rs 50,000 for the next 5 yrs in mutual funds of a corporate house. I want 40 % of my investments to be put in construction, 30% in steel, 20% in cement & 10 % in chemicals. However, is it a must for the fund manager to invest a significant portion of my investments in software sector for getting a high return ? Will the mutual fund house listen to my requirements or do they feel their pattern of investment will give higher yields than my required investment pattern ?

Answer: Mutual funds offer their schemes through an offer document. This document is unique for every scheme. It specifies the different areas in which the moneys collected will be invested. For industry specific funds, you can always get details of the industry they will be investing in. But it will not be possible to get a fund which will exactly match the pattern you require. No, mutual funds will not frame their investments according to your pattern or request. Mutual funds are managed by professionally qualified experts, hence their understanding and knowledge of investments usually is much more skillful than average investor.
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