Principal Focussed Advantage Fund (PFAF) is a high risk - high return investment proposition within the diversified equity funds segment.
The fund aims to bridge the gap between a typical sector fund and a conventional diversified equity fund by investing its corpus in stocks from 4-6 sectors.
We at Personalfn strongly believe that sector funds go against the spirit of mutual funds by depriving investors the opportunity to hold a well-diversified holding.
However informed investors who understand the intricacies of a sector and can time their entry /exit may find investments in sectors funds to be lucrative.
PFAF offers uninformed investors the opportunity to invest in an equity fund akin to a sector fund without necessitating an understanding of the sector and at relatively lower risk levels.
Having said that, investors must realise that PFAF would be a far riskier proposition vis-ą-vis a conventional diversified equity fund
Investors with an appetite for high risk investment avenues can consider investing in the fund; also a 2-3 Yr period should be treated as an ideal investment horizon. Investors who would have otherwise invested in sector funds can consider investing in PFAF given the attractive investment proposition.