With Rupee breaching the $80 mark recently, which Mutual Funds should be in focus?

view original post

Representative Image.

Photo : iStock

New Delhi: The rupee reached record lows this week and breached the Rs 80 per dollar mark for the first time. The immediate impact was seen with rising inflation and the current account deficit going up. From the perspective of mutual funds, equity mutual fund categories have been impacted the most.

Export-oriented focus sectors are likely to benefit, like the pharma and IT sectors. The consensus of experts is to maintain an investment horizon of 5-7 years and stick to allocation and diversify across large, mid and small-cap funds.

Rushabh Desai, Founder at Rupee With Rushabh Investment Service is bullish on four themes – banking & finance, consumption, pharma & healthcare and global technology. Domestic exposure to these themes can easily be taken care of by the flexi cap funds.

Flexi cap funds have very good exposure to banking and financial services, domestic technology, pharma & healthcare and consumption companies. He also stated that one can look at investing in Mirae Asset FANG Plus Fund for global technology exposure. Even Focused and Value/Contra Funds would also work well.

The IT sector will benefit the most because billings happen in dollars. However, some of the gains are being offset by cross-currency headwinds. Almost 50-60 percent of revenue comes from the Americas. The pharmaceutical sector is a net exporter and about 30 percent of total exports go to the US.

The top best performers for sectoral pharma funds include DSP Healthcare, Mirae Asset Healthcare and Edelweiss MSCI Domestic & World Healthcare fund rising between 8 to 9 percent over the last one month. Key stocks in these funds include Sun Pharma, Dr Reddy’s Labs, CIPLA, Divis Labs etc.
The top gainers for sectoral technology funds include Tata Nifty India Digital ETF, ABSL Digital Fund and SBI Tech Opportunities Fund which have gained between 6 to percent, as per data by Value Research.
Kirtan Shah, Founder at Credence Wealth Advisors said that diversification across large, mid and small caps should be enough to manage any situation provided the time horizon is appropriate. Value funds with exposure to the IT sector can be added.

Related Posts