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Motilal Oswal Mutual Fund has launched Motilal Oswal Business Cycle Fund, an open-ended equity scheme following the business cycles-based investing theme.
In a press release, Prateek Agrawal, MD and CEO of Motilal Oswal Mutual Fund said, “Indian economy is in an expansion phase which reflects in the improving corporate profitability, credit and CAPEX pick up and government support to various sectors. This also resulted in improvement in India’s domestic demand and consumption during the past 3 years, which has led to improving business prospects, driving investments in business capacity and improvement in household assets. With the business cycle strategy, we want to capitalize on this virtuous time for Indian corporates, by selecting businesses that are most likely to do well during this expansion phase.”
Niket Shah, CIO, Motilal Oswal Mutual Fund said, “In business cycle investing, strategic positioning during different phases can significantly impact returns. During expansionary phases, such as 2004-07 and 2021-24, sectors like capital goods and realty have outperformed defensive sectors due to increased capex and infrastructure development. Conversely, during slowdowns like 2009-12, FMCG sectors demonstrated resilience as essential consumption remained steady, outshining sectors like realty. Similarly, in the trough phase of 2013-20, consumer durables surpassed metals as consumption began to rebound. Understanding these dynamics, wherein market returns are driven by earnings growth and shifts in sentiment, can guide investors in making informed decisions aligned with the business cycle.
