Can I add IT or technology funds to my mutual fund portfolio?

I have been investing in mutual funds since the last six years. My portfolio consists of around 10% funds in small cap schemes, 25% in mid cap schemes, 60% in large cap schemes and 7% in debt funds. Now, I want to get into technology funds for higher returns. I want to invest in Tata Digital India or ICICI Prudential Technology Fund. I do all the background checks on my own of the funds before I invest in it. But in this sectoral technology fund, I need help to understand the exact entry and exit from the fund. Can you help me understand that how to decide when to purchase and when to redeem the sectoral technology funds? I'm looking to invest for at least five years.

–Naman Agarwal

Vishal Dhawan, Founder, Plan Ahead Wealth Advisors, responds:

Your current portfolio is well diversified. I would not suggest adding a sectoral technology fund to the portfolio , even though you have a 5 year + view on the technology fund that you will buy. Technology sector is currently at a significant premium to its longer term averages. In addition, the other funds that you have in the portfolio in large, mid and small caps are also likely to take/have exposure to the technology sector and thus you do not need to get overweight when valuations are at a premium.