The Alternate Assets Equity Investments team of the ABSL AMC has done the study capturing insights on key sectoral trends over the last two decades and applying the insights from this research to arrive at the Five Big Trends for the Future.
The fund house said that, looking at the past market data, one can decipher the interplay of various macro and micro factors coming together to create a market cycle that favours a set of industries.
“At Aditya Birla Sun Life AMC Limited, we believe that key to successful investing over a long period is an ability to spot trends. Looking at data since 2002, the top five performing sectors vary greatly in each market cycle. The variation in returns among the best and worst performing industries during a cycle is too large, again underscoring the importance of picking the right themes. Through this annual research initiative, we will bring forward some of the key market insights and dynamics at play, which we believe will be important enablers in investment decisions,” said A. Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC Limited.
The research suggests that a mix of push and pull factors to drive manufacturing in India like Atmanirbhar Bharat & Vocal for Local Initiatives by the GOI, along with diversification of global supply chains will push the manufacturing segment up in the coming years. Similarly, digitalization in India is fast tracked due to low cost of data, government initiatives like Aadhar, UPI, and increased adoption by the Corporate sector to improve productivity.
On the other hand, rising risks from Environment are pushing governments & companies to adopt a more sustainable way of doing business through green fuel, green technologies, and green mobility, hence pushing the sustainable assets up.
Low interest rates, COVID-19 induced WFH trend and Industry consolidation induced by RERA & availability of capital to larger players should lead to revival in real estate and ancillary sectors like building materials. Also, Mid and Small caps after 3 years of underperformance should outperform large caps, led by economic recovery, lower interest rates, and increased representation in emerging sectors like chemicals, digital platforms, etc.