INVESTMENT IDEAS FROM THE UNION BUDGET 2023

5 fund managers tell us which sectors and themes stand to benefit from the budget

ANISH TAWAKLEY
Deputy CIO Equity & Head Research, ICICI Prudential AMC

Over the medium term, we believe macro investing is likely to take centre stage, unlike the past years. This adds appeal to categories like the business cycle. However, investors should be cognizant that investing in such a scheme should be considered with at least a five-year horizon. This is because the themes at play could take time to play out.

We are aware that economies experience boom and bust cycles. This could happen as a result of supply or demand shocks. The production activity that was halted at the start of the pandemic is an illustration of a supply shock. Demand-driven downturns occur when enterprises and people become risk-averse or cautious, which lowers both investment and consumption spending.

Booms occur when people and businesses are feeling extremely upbeat and are spending lavishly. Demand is high, capacity is being used to its full potential and profitability is also high. Businesses are feeling optimistic about investing in this area and raising wages to entice workers.

An economic cycle's length and intensity rely on its root causes and the government's response (monetary and fiscal). The reality is that different industries tend to do well at different periods of a cycle and this rationale is used when managing a business-cycle fund. We invest in sectors that are better positioned to earn gains at that moment in the cycle depending on where we are in the economic cycle.

SAMIR RACHH
Fund Manager, Nippon India Mutual Fund