Welcome to Part 2 of our Top Sectors to Park Your Money Series. With just 3 and a half months left for 2021 to bid farewell, we thought it was about time to find out the Top Sectors where retail investors could park their money for the remainder of the year.
If you haven’t read Part 1 of this series, you can find it here.
We at smallcase asked the Top smallcase managers to talk about the Top sectors that they felt investors could Park Their Money On!
We spoke to Jiten Parmar, Founder of Aurum Capital; Manish Dhawan, Founder of Mystic Wealth and Dick Hosy Mody, Founder at Ethical Advisers.
Here are the Top Sectors picked by them
Jiten Parmar, from Aurum Capital strongly believes in these four sectors, Cement, Paper, Real Estate and Capital Goods. Sharing his thoughts below.
Cement : We believe this sector will do well over the next 2-3 years. Infrastructure sector has been doing well and will continue to do well. Real Estate has been picking up well and it also augurs very well for sectors like cement and building materials. We expect cement capacity utilizations to keep improving over the next 2-3 years as demand addition will be higher than supply addition.
Paper : This is a slightly contrarian sector. The sector is in the midst of a turnaround and expected to do well over the next 2-3 years. As schools re-opening and implementation of NEP will act as tailwinds for the sector.
Real Estate : We turned positive on this sector from the end of last year and the sector has done well. We expect good times to continue in this sector and the large organized players will keep on gaining market share at the expense of the unorganized players.Capital Goods : This is a sector which has been in downtrend for a very long period. We are seeing green shoots in this sector and it is poised for a turnaround. Invest in this sector from at least a 2-3 years view.
Manish Dhawan from Mystic Wealth has gone a different road.
The IT Sector has proved itself to be a winner. But the right time to invest in the sector was almost 6 months ago. So what sector could see such a growth today?
Market levels, sectors, story behind a stock, all these are narratives. None of these matter to your P&L statement. What matters is at what prices were you able to buy it and at what price were you able to offload it and what your exit plan was. Therefore the only thing a trader/investor should be interested in is the Risk to reward ratio.Talking about risk to reward, we see that the auto and auto ancillary sector is throwing a lot of opportunities. This sector is where IT was 5-6 months ago. Once again, do not construe this as investment advice. You should consult your advisor who is aware of your risk profile before embarking on this journey! And needless to say, have a documented exit plan at your disposal if the hypothesis doesn’t play out as expected.
The Automobile industry of India, currently manufactures 26 mn vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers, and quadricycles in April-March 2020, of which 4.7 mn are exported. The EV industry will create five crore direct and indirect jobs by 2030.
Finally, last but never the least, Dick had his own interesting bets in the Metals, Finance and the Entertainment (Leisure and Travel included) sector.
Metals and Finance Sectors
Metals and finance sectors are the bedrock of economic activity globally. Despite the progress in vaccinations in 2021, there STILL remains lockdown-like situations across the globe & GDP growth is largely fuelled by limited / basic consumer spend so far.In such a scenario, capex plans remain muted and financing needs; bare minimum. Metal stocks so far have had a dream run, and financials, selectively performed well and stocks in both these sectors are now in Consolidation mode.
Leisure, Travel and EntertainmentAnother interesting sector would be potential beneficiaries of a rebound in leisure, travel & entertainment. We all know from our own personal experience, that there is a sufficient amount of UNSPENT cash sitting in banks/liquid MFs- Waiting to be spent when restrictions are FULLY LIFTED.
These are some of the most promising sectors for investors to park their money on for the remainder of the year according to these Top smallcase Managers! Share what you think about these sectors and its potential for you?
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Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.