You cannot ignore the rapid increase in digitization and innovation across the globe. Spurred by the pandemic, this tech wave has led to positive growth in the sector. In reflection of this emerging trend, technology sector funds in India have delivered over 40% returns over the last year.
If you thought that tech funds included only technology-based organizations like Microsoft, Wipro, HCL Tech, etc., then you are truly mistaken. Services, consumer durables, engineering, financial and more are sectors included within this category. The gamut of offerings under the ‘technology’ tag is diverse, and most of the top-ranking tech-based thematic funds have a balanced mix of large, mid and small-cap funds.
The tech buzz
The surge in adoption of technology across Indian organizations is the aftereffect of the lockdown, pushing traditional organizations to upgrade their legacy processes and move to online methods of functionality. We see how businesses across domains have seamlessly adopted the tech route to find ways and means of business continuity. Talk about the evolution of sectors like Finance, Food, Advertisement and Education to FinTech, FoodTech, AdTech and EdTech, respectively. The emergence of these organizations has led to the growth of the IT sector at large.
India is known for providing IT services globally for over two decades. We are renowned for our excellence in programming outsourcing. Our fluency in English, expert knowledge of the latest in technology as well our competitive low labour costs, all these factors make India a viable choice as a contender for international projects. The numerous promising tech-based start-ups that have mushroomed and blossomed with the use of AI, ML, Blockchain and GIS Technology prove India’s capability to deliver quality service.
While we gain recognition for our services offered, we are now making waves with the latest in product based tech organizations too. Riding the tech wave are Indian organizations like Zoho Corporation Pvt. Ltd., Tejas Networks, Flipkart, Zomato and more. Organizations like Zoho and Tejas Networks offer their services in the global markets, while ones like Flipkart and Zomato are leaders in the domestic markets. There are numerous tech-based platforms entering the market, offering services across varied domains. The image below are snippets of the tech companies that made headlines in the past 30 days for funding’s, IPOs and records.
How can you gain from the tech wave?
Overall, there are two ways through which you may take part in the booming technology wave. One, by investing in domestic sector funds, which mean investing in organizations like Zoho, Flipkart and more which are Indian based organizations. And two, by investing in a mix of domestic and foreign funds through ETFs, LRS or other financial products that offer global exposure. These include a mix of Indian tech organizations and a few global market leaders. While India is an emerging market; countries like the US and China offer opportunities to invest in tech giants like Facebook, Amazon, Apple, Netflix, Google and Alibaba that are established market leaders too big to fail.
Technology funds aim at investing in innovative and emerging tech-based platforms and organizations that are likely to disrupt the tech world with their services and products. We are in the midst of the technology revolution. To shy away from tech sector investments in your portfolio would be like choosing to run paper-based business processes in a paperless digitized world. Going overboard by investing solely in the tech-based sector too will have its downsides due to sectoral risks.
Choose wisely before you invest.
And if you are still in search of further information on the Technology Sector, then join us for our next webinar with expert Mr Raunak Onkar.
Topic: Technology Theme: How to Play it? Local & Global
Date: Friday, 06th August 2021
Speaker: Mr. Raunak Onkar, Co-Fund Manager & Research Head, Parag Parikh Mutual Fund
Time: 05:00 pm