Is it a good idea to invest in technology funds?

IT (Information Technology) sector saw a growth of 34.51 per cent in one year. That is, S&P BSE Information Technology index grew from 11,959.92 all the way to 16,087.82 levels. So, looking at this scenario people are very much interested to invest in the IT sector via the mutual funda route. But should they do so?
 
IT sector currently is heading towards its 52-week high supported by strong quarterly results and rupee depreciation. However, it seems that the greed factor is increasing in this sector which is followed by a fall and exit with losses. So, if you are looking at the short-term then staying away from this sector would be a good idea and investment in this sector with a long-term view is advisable.
 
Now if we look at the mutual funds specifically dedicated towards IT sector, then we find that the average returns provided by the technology funds for 1-year, 3-year, 5-year and 10-year periods were 16.03 per cent, 16.28 per cent, 11.96 per cent and 22.85 per cent, respectively with average risk, as measured by beta at 0.59.

The average holdings of IT-dedicated MFs in large-cap companies were 65.05 per cent, followed by small-cap companies with average holdings of 14.06 per cent and mid-cap companies with average holdings of 8.59 per cent. So, taking all things into consideration, it is better to invest in IT-dedicated funds with a long-term investment view. Though one must stick to his/her financial plan and invest based on their risk appetite. Investment in sector funds to be done once provision for all needs are met. Conservative risk taker must refrain from investing in these funds as the risk quotient is high. However, moderate risk takers should not have more than 10 per cent of the portfolio dedicated towards these funds and aggressive risk takers should invest in these funds with a minimum of 7 years of time horizon.