Mumbai: Cashing-in on sectoral play, wherein individual sectors have outperformed the stock market every year since 2001, IDFC mutual fund will launch a scheme based on this very concept.
IDFC mutual fund which recently took over Standard Chartered Mutual Fund has decided to launch a scheme based on this very theme called IDFC Strategic Sector (50-50) Equity Fund.
The said equity fund, would invest 50% in one sector while the remaining funds will be pumped-in a diversified portfolio.
IDFC Mutual Fund Investment Head Rajiv Anand said every year the sector that performs is different and the fund managers of the scheme will try to identify which sector is likely to dominate in that year and will invest in them.
Meanwhile, a study done by Citigroup found that gains made by individual sectors were far greater than the capital market.
“In 2001, it was the auto sector that scored highest gains and outsmarted the Nifty index for that year. In 2002, it was energy sector, in 2003, it was metal and in 2004, it was real estate. Incidentally, the outperformance has almost always been by a wide margin,” Citigroup added.
Anand said as per the Citigroup study, the gains made by even the second and third best performing sectors also were way ahead of gains made by the Nifty.
The wide-based Nifty index went up by 55% during 2007 while metal sector shares went up by a whopping 193% in the same year. In 2005, Nifty was up by 36% while real estate shares were up by 289%.