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Business cycle funds stay upbeat on these sectors as opportunities beckon

Over the past year, these business cycle themed mutual fund schemes delivered an average return of 11 percent while the NIFTY 50 – TRI cranked out four percent

September 19, 2022 / 12:05 PM IST
Six mutual fund (MF) schemes currently follow the theme of ‘business cycle’. A business cycle fund aims to identify sectors - and pick stocks from them- that show signs of growth in their business cycles. A business cycle refers to various stages where a company or a sector undergoes a period of expansion, moderation and contraction. Fund managers of these schemes identify opportunities across sectors using various metrics such as economic parameters, investment indicators, and business and consumer sentiment indicators. Over the past year, these funds delivered an average return of 11 percent while the NIFTY 50 – TRI gave four percent. Most of them follow a top down approach of identifying the sectors first and then select the stocks within them. Following are the preferred sectors by the five business cycle funds (excluding Kotak business cycle fund, which is now a new fund offer). They have managed a corpus of about Rs 10,000 crore. Portfolio data as of August 31, 2022. Source: ACEMF.
Six mutual fund (MF) schemes currently follow the theme of ‘business cycle’. A business cycle fund aims to identify sectors - and pick stocks from them- that show signs of growth in their business cycles. A business cycle refers to various stages where a company or a sector undergoes a period of expansion, moderation and contraction. Fund managers of these schemes identify opportunities across sectors using various metrics such as economic parameters, investment indicators, and business and consumer sentiment indicators. Over the past year, these funds delivered an average return of 11 percent while the NIFTY 50 – TRI gave four percent. Most of them follow a top down approach of identifying the sectors first and then select the stocks within them. Following are the preferred sectors by the five business cycle funds (excluding Kotak business cycle fund, which is now a new fund offer). They have managed a corpus of about Rs 10,000 crore. Portfolio data as of August 31, 2022. Source: ACEMF.
Banking has been the top sector of all the five business-cycle based funds. They mostly prefer private sector banks. ICICI Pru Business Cycle, Tata Business Cycle and Baroda BNP Paribas Business Cycle increased exposure in the sector, while L&T Business Cycles Fund and Aditya Birla SL Business Cycle Fund cut exposure in the sector in the last six months.
Banking has been the top sector of all the five business-cycle based funds. They mostly prefer private sector banks. ICICI Pru Business Cycle, Tata Business Cycle and Baroda BNP Paribas Business Cycle increased exposure in the sector, while L&T Business Cycles Fund and Aditya Birla SL Business Cycle Fund cut exposure in the sector in the last six months.
Among the financial sector, the preferred stocks from the sub-sectors include insurance, housing finance companies and NBFCs.
Among the financial sector, the preferred stocks from the sub-sectors include insurance, housing finance companies and NBFCs.
Petroleum products have been one of the top five sectors among business cycle funds. Baroda BNP Paribas Business Cycle Fund increased its exposure in the sector significantly in the last six months.
Petroleum products have been one of the top five sectors among business cycle funds. Baroda BNP Paribas Business Cycle Fund increased its exposure in the sector significantly in the last six months.
Under the automobile sector, two- and three-wheelers and passenger cars are preferred by business cycle funds. Baroda BNP Paribas Business Cycle Fund added fresh positions in the auto sector in the last six months.
Under the automobile sector, two- and three-wheelers and passenger cars are preferred by business cycle funds. Baroda BNP Paribas Business Cycle Fund added fresh positions in the auto sector in the last six months.
ICICI Pru Business Cycle and Baroda BNP Paribas Business Cycle Fund increased exposure in the sector over the last six months.
ICICI Pru Business Cycle and Baroda BNP Paribas Business Cycle Fund increased exposure in the sector over the last six months.
L&T Business Cycles, Tata Business Cycle and Aditya Birla SL Business Cycle Fund increased their position in the stocks of industrial products.
L&T Business Cycles, Tata Business Cycle and Aditya Birla SL Business Cycle Fund increased their position in the stocks of industrial products.
Aditya Birla SL Business Cycle and Tata Business Cycle Fund increased their exposure in the cement sector.
Aditya Birla SL Business Cycle and Tata Business Cycle Fund increased their exposure in the cement sector.
Baroda BNP Paribas Business Cycle, Aditya Birla SL Business Cycle and Tata Business Cycle Fund increased their exposure in construction stocks.
Baroda BNP Paribas Business Cycle, Aditya Birla SL Business Cycle and Tata Business Cycle Fund increased their exposure in construction stocks.
ICICI Pru Business Cycle Fund took a fresh position in the sector over the last six months while Baroda BNP Paribas cut its exposure notably.
ICICI Pru Business Cycle Fund took a fresh position in the sector over the last six months while Baroda BNP Paribas cut its exposure notably.
Three schemes --Aditya Birla SL Business Cycle, Tata Business Cycle and ICICI Pru Business Cycle Fund -- increased allocation to the sector in the last six months. However, L&T Business Cycles Fund avoided holding the sector, as of August 31, 2022. Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary. Disclaimer: Moneycontrol.com advises users to check with certified experts before making any investment decisions.
Three schemes --Aditya Birla SL Business Cycle, Tata Business Cycle and ICICI Pru Business Cycle Fund -- increased allocation to the sector in the last six months. However, L&T Business Cycles Fund avoided holding the sector, as of August 31, 2022.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Disclaimer: Moneycontrol.com advises users to check with certified experts before making any investment decisions.
Dhuraivel Gunasekaran
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