A glimpse of this could be seen in the strong inflows in thematic/sectoral funds. Thematic/sectoral funds have garnered inflows of more than Rs 18,900 crore, so far in 2023.
This category received the second highest inflows after smallcap funds that witnessed inflows to the tune of Rs 28,984 crore.
At a time when global macroeconomic conditions aren’t conducive, India is shining bright and this has seen investors increasing bets on stocks in the domestic-oriented sectors.
Shares of public sector companies are witness to this, as they have given stellar returns this year. Year-to-date, the S&P BSE PSU index has given more than 25% returns, while the BSE CPSE index has given more than 37% returns.
Some of the prominent gainers in the PSU space are Bharat Heavy Electricals, Coal India, Hindustan Aeronautics, NTPC, and Power Grid Corporation of India, giving high double-digit returns to investors year-to-date.
Further, a look at the thematic funds also showed that PSU schemes have given handsome returns over the last one year. Aditya Birla Sun Life PSU equity fund has given a staggering 47.4% returns over a 1-year period. NTPC, Coal India, Power Grid Corporation of India are among the funds’ top holdings.
SBI PSU Direct Plan Growth is another fund that has given strong returns of over 43% over a 1-year period. BHEL, Coal India, Power Grid Corp, Hindustan Aeronautics are among the funds’ top holdings.
The third best performing fund was Invesco India PSU Equity fund, giving 40% returns to investors. NTPC, Bharat Electronics, Power Grid Corp, Container Corp, and Hindustan Aeronautics are among the funds’ top holdings.
What should investors do?
In the run-up to the general elections next year, most money managers see domestic-oriented sectors such as capital goods, infrastructure, power, and utilities doing well.
“I think the new themes we are more positive on, which are basically things related to power capex or revival in rural consumption, pharma, these are the new sets,” said Manish Gunwani of Bandhan AMC.
Meeta Shetty of Tata AMC is also betting on India’s macros and sees government capex gaining traction.
“The private capex which was lagging over the past decade, is finally seeing some green shoots. This should mean good traction for the industrial, capital goods and power sector,” she said.
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