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A leading fund manager in a recent press meet shared how the IT sector generated the highest alpha among all sectors in the long term. He attributed the success of the IT sector to the introduction of a revolutionary technology in the market that changed the way most of the sectors worked.
According to the fund manager, Artificial Intelligence (AI) and Electric Vehicles (EV) can become the next IT like industry in days to come.
We spoke to a few experts to understand if these two sectors could create wealth for your clients. Here’s what they had to say.
Vinay Paharia, CIO, PGIM MF believes that both AI and EV are emerging themes that will increase productivity in various sectors. However, Vinay said that leveraging AI and EV by companies does not necessarily translate into their performances.
Santosh Singh, Fund Manager, Motilal Oswal AMC believes that AI is comparable to the introduction of computing in the preceding generation. He believes AI will affect & the growth of all sectors that leverage it widely over the next few years. When it comes to EV, Santosh thinks the impact will be limited to the auto sector.
Anupam Tiwari, Head of Equity, Groww MF believes that EV will replace the current vehicles working on internal combustion engines. In that way, EV will become a prominent factor for the growth of the auto sector. However, he is more skeptical when it comes to the impact of AI. He said, “As all sectors will start adopting AI, it is difficult to say whether it will become the determining factor for growth for any specific sectors.”
Chirag Mehta, CIO, Quantum MF believes that AI and EV will predominantly affect the IT and auto sectors. He said, “AI and EV don’t exist as sectors yet. However, both these technologies are here to stay. They will create a big impact on the IT and auto industries. We are already seeing their impact as many industries are moving towards these new technologies. Both these technologies have a lot of potential.”
While both the sectors currently offer limited opportunity in the listed space, investors may look at exploring these sectors through venture capital funds, private equity funds or private debt funds, said Vijay Chaudhary, Director, Renaissance Investment Managers.
