Top 5 Mutual Fund Picks of Future Trending Themes of 2021

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According to a recent World Bank report, the Indian economy will expand 8.3% in FY2021-22. And that’s not all; the UN expects that India’s GDP will grow 7.5% in 2021. Both the predictions clearly indicate that the Indian economy will soon be back on track which was once derailed due to the second COVID wave.

The re-valuation of fiscal policies after the pandemic, emphasis on local manufacturing by the government, announcement of monetary programs to boost the economy, change in customer behavior have paved the way for some themes that are all ready to bounce back.

On the basis of the future economic trends, we have shortlisted the best themes that will trend in 2021, along with the top mutual funds to invest in for good returns. Let us begin!!!

Top 5 Themes in Mutual Fund Market

Technology Sector:

IT mutual funds hold good scope in the upcoming future, thanks to the various ‘Digital India’ campaigns running across the country. This has turned to be a game-changer as several SMEs and MSMEs have started growing digitally. Moreover, implementing the latest technologies like AI, cloud computing, and machine learning will skyrocket the automation process and ultimately increase product efficiency. The recovery of the global market post-pandemic will further open doors to export Indian software & hardware services.

• ICICI Pru Technology Fund: This fund has managed to grab the first spot with exceptional returns in the past. The fund invests majorly in large-cap IT companies (50%), followed by mid-cap (23%) and small-cap (17%) companies. The fund follows a pure growth style and the track record of management is also promising.

*as on July 1, 2021

Banking Sector

The stressed sector is now finally seeing a ray of hope after a gloomy sky. Since the economy is reviving back, the growth in the banking sector is bound to be stable, as their treasures will fulfill the credit requirement of the corporates. Furthermore, several banking reforms and corporate governance has helped in controlling the NPA. Also, there are speculations that the RBI may increase the interest rate; if this happens, the net interest margins will also increase. The bouncing back of the PSU banks is again a bonus.

• SBI Banking & Financial Services Fund: The fund has provided exceptional annualized returns in the long run. Coming to the asset allocation, the fund managers have smartly diversified the assets in large-cap companies (52%), mid-cap (9.53%), and small-cap companies (2.26%). Also, to surge good gains during market corrections, the fund parks the assets in cash and cash equivalents.

*as on July 1, 2021

Infra Development Sector

This is an umbrella sector that encompasses sectors related to construction, power & energy, metals & mining, engineering, etc. Since, after the second COVID wave, the economic activities are back in action; therefore, this theme looks promising. The willingness of the government to work on the public-private partnership model will invite surplus private CAPEX investment. In addition, the great emphasis laid on the urban and rural development in the Union Budget of 2021 will again derive the market movements.

• IDFC Infrastructure Fund: The fund invests majorly in promising mid-cap stocks for high future growth. Talking about sector allocation, the fund managers have diversified the assets well in construction, engineering, energy, and metals.

*as on July 1, 2021

Consumption Sector

Undoubtedly, the consumption sector suffered badly amid the pandemic due to less spending. But, with the economy coming back on track and changing consumer’s lifestyles, this sector is something you can’t miss. The change in the average income of people will give an extra push to the economy, as the purchasing capacity in terms of durable and non-durable goods has spiked.

• Mirae Asset Great Consumer Fund: It is among the best pick in the consumption sector; well, the credit goes to the strong market-wise and consumption sector-wise asset allocation. Moreover, the management of the fund is qualitative, which is again a plus point.

*as on July 1, 2021

Gold Investment

The chain of good returns from gold investment was halted in recent times due to some corrections. But the post-pandemic scenario again makes it the current favorite. Among the strong reasons is the fear of inflation and debt increase over the Indian economy, increasing the demand for gold in the commodity market. Many countries, including the US, are planning to increase their gold reserve to make their currencies stronger; this is again a good indication. Also, if you are looking for ways to hedge your portfolio, then the gold investment should be your top pick.

• Kotak Gold Fund: If you target good returns, this fund is your match made in heaven. Below is the performance sheet portraying high returns in the long run.

*as on July 1, 2021

Curtains Down!!!

So, these were the trending themes, along with the thematic mutual funds, that can add value to your portfolio. So, without much ado, quickly start your SIP and enjoy profitable returns. For more information, give a miss call on 9660032889.