mutual The prevalence of business cycle schemes is increasing among common investors in the country to invest in funds. Last year, these mutual funds gave strong returns ranging from 32 to 56 percent. During this period, HSBC, Mahindra Manulife and Quant schemes have given returns of over 50 per cent to investors. Let us tell you that business cycle funds are a category of mutual funds that invest in stocks and sectors during different phases of the business cycle that are expected to perform well depending on the circumstances at that time. According to industry data, these top three funds have significantly outperformed the Nifty 500 TRI index, which returned 35.11 per cent in the same period.
Assets under management of business cycle funds reach Rs 37,487 crore
Firoz Aziz, Deputy CEO of Anand Rathi Wealth, said this impressive growth reflects growing investor interest in these funds. Currently, there are only 16 business cycle funds in the market, of which only 3 funds have completed 3 years. Assets under management in this category have now more than doubled to Rs 37,487 crore compared to Rs 17,238 crore in September 2021. These funds attempt to identify economic cycles and then select stocks from sectors that are likely to perform well in the respective market conditions.
10 of 16 funds gave an average return of 42 percent
These funds allocate their investments in different sectors depending on different conditions such as recession or initial recovery of the economy. For example, in recessions, defensive sectors such as utilities and pharmaceuticals do well. On the contrary, sectors such as automobiles, financials and infrastructure have seen early progress in the recovery. Of the 16 such funds currently available, 10 mutual funds have a track record of more than a year and all but one have outperformed the Nifty 500 TRI in the last 12 months. According to industry data, these 10 funds have given an average return of 42 percent.
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