Financial

These Ten Sectors Were Mutual Fund Favourites In 2021

These were sectors that registered a significant increase in the share of overall MF equity AUM

December 29, 2021 / 11:51 AM IST

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2021 has been a remarkable year for equity fund investors. Many sectors across the equity market spectrum were poised for healthy prospects post the outbreak of the pandemic and turned attractive for fund managers taking long positions. Here is the list of the top 10 sectors that turned mutual funds’ favorites over the last one year ended November 30, 2021. Sectors that registered a significant increase in the share of overall MF equity AUM compared to last year were considered. Sectors are as classified by ACEMF.

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As businesses get increasingly digitized and invest more in technology, software companies capitalised on the trend. Many schemes added those stocks in their portfolios. Schemes such as Aditya Birla SL ESG, Invesco India ESG Equity, Axis Value, HDFC Dividend Yield and IIFL Quant increased exposure to this sector over the last one year.

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The Nifty PSU Bank index managed to outpace the Nifty 50 in 2021, thanks to the turnaround in the profitability of PSU banks. As per a CNBCTV18 report, PSU banks reported their highest quarterly profits in the last 24 quarters and none of the PSU banks have reported net loss in Q2FY22. Schemes such as Quant Quantamental, Quant Infrastructure, ITI Value, Aditya Birla SL Pure Value and Indiabulls Tax Savings upped their holding in the sector.

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Acquisitions of EV tech companies and ramping up their component business with an eye on the global market have improved the growth prospects of auto ancillary companies. Schemes like L&T Large and Midcap, SBI Large & Midcap, Sundaram Large and Mid Cap, Sundaram Large and Mid Cap and SBI Magnum Midcap increased stakes in auto ancillary companies over the last one year.

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E-commerce is one of the fastest-growing retail markets. New-age platform stocks stole the limelight in recent periods as the pandemic brought with it an array of newer opportunities & technological advancements that changed the way people shop. Schemes with added exposure to the sectors in 2021 include ICICI Pru Retirement Fund-Pure Equity, Kotak Tax Saver, SBI Consumption Opp, Franklin India Opportunities and Axis Special Situations.

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While the export business for the Indian drug manufacturing companies not doing well over the last few years, companies providing healthcare services such as hospitals, diagnostic chains and insurance offered newer opportunities for fund managers. Schemes such as Motilal Oswal Long Term Equity, Motilal Oswal Large & Midcap, HSBC Mid Cap, BOI AXA Flexi Cap Fund increased their allocation to the sector.

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Nippon India ETF Dividend Opportunities, Motilal Oswal Dynamic, Aditya Birla SL Equity Savings, Invesco India Focused 20 Equity and Invesco India Infrastructure Fund increased exposure to the sector in 2021.

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Top EV stocks in the commercial vehicles space gained fund managers’ attention. They believe a continuation of healthy demand along with the easing of semiconductor supply issues during the upcoming year. Axis Value, UTI Transportation & Logistics, UTI Focused Equity, Navi Long Term Advantage and HSBC Focused Equity Fund were some of the schemes that added significant exposure to the sectors in 2021.

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Apart from the consumption based funds, schemes such as IIFL Quant, Invesco India ESG Equity, Axis Long Term Equity, Axis Focused 25 and Axis Special Situations Fund increased allocation to the sectors.

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Schemes that increased exposure to the sector include Axis Value, ITI Small Cap, JM Core 11, SBI Magnum Children’s Benefit Fund-Investment, Taurus Discovery (Midcap) and SBI PSU Fund.

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Quant Small Cap, Canara Rob Infrastructure, Quant Active, Tata Business Cycle and Quant Absolute Fund upped their holding in the sector in 2021.

Dhuraivel Gunasekaran

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Source: https://www.moneycontrol.com/news/photos/business/personal-finance/these-ten-sectors-were-mutual-fund-favorites-in-2021-7875721.html

Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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