The fund mentioned (L&T Infrastructure Fund) is a sectoral fund. In general, we suggest that a long term investor should avoid sectoral funds.
The reasons are:
- Lack of Diversification and flexibility – you cannot go beyond the stocks in the fund.
- Investor has to make hard decisions on which sector to invest and when
- These funds have a higher Expense Ratio
While infra is a good theme to invest, it might be a better idea to invest in large cap or multi