Spotting the trends early is important for investors and fund managers to stay ahead in the game. A recent study conducted by Aditya Birla Sun Life Mutual Fund shows that manufacturing, digitalization, green initiatives, real estate and revival in mid & small caps are the five big trends for the future.
The report analyzed key sectoral data over the last two decades to arrive at the trends that may play out over the next three-five years, the AMC said in its annual trendspotting report released on Thursday.
“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," said A. Balasubramanian, Managing Director and Chief Eecutive Officer, Aditya Birla Sun Life AMC.
The five major trends identified by the AMC are as follows:
Manufacturing: The company is bullish on the sector as it sees the industry benefitting from initiatives and factors like Atmanirbhar Bharat, Vocal for Local and diversification of global supply chains.
Digitalization: The report said digitalization benefitted from low cost of data and government initiatives like Aadhaar and UPI. It sees the trend continuing due to increasing adoption by corporate sector to improve productivity.
Sustainability: According to the report, the rising risks from environment is pushing government and companies to adopt more sustainable ways of doing business and this trend is likely to benefit green tech and green mobility companies.
Real estate: 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, the report said.
Revival in mid & small caps: After 3 years of underperformance, mid and small caps should outperform large caps, led by economic recovery, lower interest rates and increased representation in emerging sectors like chemicals, digital platforms, etc., the AMC noted.
