Losers of yesterday turn into winners of today
Till the end of September 2020, the COVID-19 resilient stocks were strong and the same was reflected in the performance of funds dedicated to such stocks or sectors. IT and Pharmaceutical dedicated funds were a couple of them that outperformed the market by a huge margin in the first nine months of 2020.
Nevertheless, in the last one month, the situation has started to change and laggards of the last nine-month are gaining traction and becoming leaders. Banking and financial services are such sectors that have gained a lot in the last one month. With the hope of a new vaccine, all the stocks such as hotels, airlines & tourism have gained prominence in the latest round of market surge.
The funds dedicated to such stocks have also surged. In the last one month, sectoral funds such as financial services that include companies from banking, insurance, home loan, etc have gained by 11 per cent on average. During the same period, broader indices also gained by 4.7 per cent.
Meanwhile, in the same duration, funds dedicated to the IT & pharmaceutical sector has hugely underperformed frontline indices.
Nonetheless, if we take the last one-year’s return, funds such as infrastructure and banking are yet in a negative zone.
The table below shows the average performance of the funds from different categories:
|
|
Average of return (per cent)
|
|
Categories
|
1 month
|
3 month
|
6 month
|
1 year
|
3 years
|
5 years
|
|
Sectoral - Financial Services
|
11.26
|
19.58
|
36.38
|
-8.83
|
1.11
|
9.57
|
|
Sectoral - Infrastructure
|
5.16
|
7.04
|
26.44
|
-6.67
|
-6.54
|
3.69
|
|
Index Funds
|
4.99
|
10.42
|
33.35
|
3.78
|
5.63
|
9.53
|
|
Large & Mid Cap
|
4.93
|
10.45
|
32.34
|
5.08
|
2.58
|
9.04
|
|
Large Cap
|
4.87
|
9.67
|
29.89
|
3.90
|
4.69
|
8.77
|
|
Mid Cap
|
4.82
|
11.09
|
35.91
|
11.39
|
1.81
|
8.69
|
|
Multi Cap
|
4.72
|
9.44
|
30.61
|
5.28
|
3.70
|
8.91
|
|
Value / Contra
|
4.71
|
10.56
|
34.81
|
4.50
|
0.18
|
7.66
|
|
Tax Saving (ELSS)
|
4.61
|
10.25
|
31.84
|
4.93
|
2.95
|
8.77
|
|
Thematic
|
4.46
|
7.16
|
28.86
|
5.41
|
0.01
|
6.71
|
|
Sectoral - Energy / Power
|
4.32
|
5.45
|
34.21
|
8.70
|
-1.44
|
9.92
|
|
Thematic - Consumption
|
4.12
|
5.94
|
25.60
|
1.69
|
3.55
|
9.33
|
|
Thematic - Dividend Yield
|
3.56
|
7.18
|
31.08
|
6.19
|
0.61
|
7.43
|
|
International
|
3.55
|
6.43
|
21.47
|
11.39
|
9.77
|
9.65
|
|
Small-Cap
|
2.83
|
13.74
|
43.63
|
13.87
|
-1.48
|
7.80
|
|
Sectoral - Technology
|
2.04
|
19.60
|
58.53
|
44.10
|
24.32
|
15.16
|
|
Thematic - MNC
|
1.19
|
4.58
|
21.49
|
5.51
|
3.19
|
6.57
|
|
Sectoral - Auto
|
0.56
|
7.93
|
43.87
|
-1.35
|
-8.37
|
0.99
|
|
Sectoral - Pharma
|
-2.47
|
6.11
|
28.12
|
56.12
|
15.59
|
6.53
|
If the sector rotation continues, we can expect banking and other companies, which underperformed during the COVID-19, to outperform from here on. Hence, you can position yourself accordingly to make the most out of such rotation.