Check out these MF favourite sectors that are undergoing business upcycle

There are 11 thematic mutual fund schemes that offer portfolios comprising stocks that may benefit from upcycle in underlying businesses. These schemes identify sectors - and pick stocks from them - that show signs of growth in their business cycles. A business cycle comprises various stages where a company or a sector undergoes a period of expansion, moderation, and contraction (or consolidation). Fund managers of these schemes identify opportunities across sectors using various metrics such as economic parameters, investment indicators, and business and consumer sentiment indicators. Most of them follow a top down approach of identifying the sectors first and then selecting the stocks within them. They manage the investments dynamically to benefit from changes in fortunes of underlying businesses. Following are the preferred sectors by the 11 business cycle funds. They have managed a corpus of about Rs 20,000 crore. Portfolio data is as of September 30, 2023. Source: ACEMF.

Private banks
Sample of business cycle schemes that held significant exposure to the sector: Baroda BNP Paribas Business Cycle, Bandhan Emerging Businesses and Axis Business Cycles

IT – Software
Sample of business cycle schemes that held significant exposure to the sector: Aditya Birla SL Business Cycle, HDFC Business Cycle and Axis Business Cycles

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Engineering – Construction
Sample of business cycle schemes that held significant exposure to the sector: HSBC Business Cycles, Tata Business Cycle and HDFC Business Cycle

Refineries
Sample of business cycle schemes that held significant exposure to the sector: HSBC Business Cycles and Aditya Birla SL Business Cycle

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Pharmaceuticals & Drugs
Sample of business cycle schemes that held significant exposure to the sector: Baroda BNP Paribas Business Cycle, Bandhan Emerging Businesses and ICICI Pru Business Cycle

Cement & Construction Materials
Sample of business cycle schemes that held significant exposure to the sector: Tata Business Cycle, ICICI Pru Business Cycle and Aditya Birla SL Business Cycle

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Telecommunication - Service Provider
Sample of business cycle schemes that held significant exposure to the sector: ICICI Pru Business Cycle, Aditya Birla SL Business Cycle and HDFC Business Cycle

Automobiles-Trucks/Lcv
Sample of business cycle schemes that held significant exposure to the sector: Baroda BNP Paribas Business Cycle, HDFC Business Cycle and Tata Business Cycle

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Finance – NBFC
Sample of business cycle schemes that held significant exposure to the sector: Aditya Birla SL Business Cycle, Axis Business Cycles and Bandhan Emerging Businesses

Construction - Real Estate
Sample of business cycle schemes that held significant exposure to the sector: Axis Business Cycles, Bandhan Emerging Businesses and HDFC Business Cycle

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