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There are 11 thematic mutual fund schemes that offer portfolios comprised of stocks that could benefit from upcycling the underlying businesses. These schemes identify sectors that show signs of growth during the business cycle and select stocks from them. A business cycle consists of various stages in which a company or sector goes through periods of expansion, relaxation, and contraction (or consolidation). Fund managers of these schemes use various indicators such as economic indicators, investment indicators, business and consumer sentiment indicators to identify opportunities across sectors. Most follow a top-down approach that first identifies a sector and then selects stocks within that sector. They dynamically manage their investments to benefit from changes in the fortunes of the underlying business. The 11 cyclical fund priority sectors are: They controlled material worth around Rs 20,000 crore. Portfolio data is current as of September 30, 2023. Source: ACEMF.
private bank
A sample of cyclical schemes with significant exposure to this sector: Baroda BNP Paribas Cyclical, Bandhan Emerging Business, and Axis Cyclical.
IT – Software
Sample cyclical schemes with significant exposure to this sector: Aditya Birla SL Business Cycle, HDFC Business Cycle, Axis Business Cycles
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Engineering – Construction
A sample of cyclical schemes with significant exposure to this sector: HSBC cyclical, Tata cyclical, HDFC cyclical.
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Refinery
Sample cyclical schemes with significant exposure to this sector: HSBC Business Cycles and Aditya Birla SL Business Cycle
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Medicines and Pharmaceuticals
Examples of cyclical schemes with significant exposure to this sector: Baroda BNP Paribas Business Cycle, Bandhan Emerging Businesses, ICICI Pru Business Cycle
cement and construction materials
A sample of cyclical schemes with significant exposure to this sector: Tata cyclical, ICCI Puru cyclical, and Aditya Birla SL cyclical.
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Telecommunications – Service Provider
A sample of cyclical schemes with significant exposure to this sector: ICICI Pru Cyclical, Aditya Birla SL Cyclical, HDFC Cyclical.
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Car-Truck/LCV
Examples of cyclical schemes with significant exposure to this sector: Baroda BNP Paribas Business Cycle, HDFC Business Cycle, Tata Business Cycle
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Finance – NBFC
Sample cyclical schemes with significant exposure to this sector: Aditya Birla SL Business Cycles, Axis Business Cycles, Bandhan Emerging Businesses
Construction – Real Estate
A sample of cyclical schemes that hold significant exposure to this sector: Axis Cyclical, Bandhan Emerging Business, HDFC Cyclical.
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