The Hindu Business Line : Sectoral funds: Ranking keeps changing

The pecking order for sector funds is turning again, a trend now marked by a slow but steady onset of auto and FMCG, and a fading-away of tech and pharma.

Consider the figures that have come to the fore in the past three months: FMCG and auto are reigning supreme in the sectoral funds space with 9.24 per cent and 6.49 per cent, respectively as on September 27.

In contrast, tech and pharma are both in the negative territory, with minus 6.18 per cent and minus 7.37 per cent respectively over the same period, according to data released by Value Research.

Latest trends

The scenario may be seen against what was evident till recently — a downturn of sorts in key sectors such as automobiles and a certain buoyancy in areas like technology. As things stand, the dynamics of the game seem to have changed.

Investment circles aware of such changing fortunes have also observed the latest trends, especially so with regard to select FMCG and auto stocks. Some fund managers have lately adjusted their allocations in order to stay in tune with the changes.

Mr Ambrish Agarwal, Director of distribution firm Eastern Financiers, is sensitive to the fact that tech, for one, has witnessed a change in perception. His response is simple: Discerning investors may well raise their allocation to tech at this stage if they wish to get things relatively cheaper. “We believe tech will generate reasonable returns if investors stay with it for a decent stretch of time,” he said.

The situation is somewhat different for the six-month period.As Value Research puts it, pharma funds were in the positive terrain, with 7.88 per cent to their credit (as on September 27). Also, tech funds were a shade better, giving roughly minus 1.5 per cent during the period.

The most up-to-date performance figures spawned by FMCG and auto funds, however, still do not compare with banking sector products. The latter are positioned well ahead on the charts (as they have lately been, especially compared with tech funds), providing an average three-month score of 20 per cent or so. Banking funds, incidentally, have delivered over 40 per cent in the six-month period in question.

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