ICICI Prudential Business Cycles Fund best reflects the fund house’s macro and sector calls with its benchmark unconstrained go-anywhere approach that maximizes alpha from nimble top down sector calls.
Anish continues to favour domestic cyclicals but has been making some changes at a sector level within this broad theme. Increase in allocation to private banks and cement and reduction in auto are some recent calls.
He continues to remain circumspect on metals and commodities as he doesn’t see the case for a significant global demand uptick in metals (except copper). Steel – which is the major metal in our market – has not seen any significant ramp up in product prices.
His contrarian call a quarter ago to take a 4% position in a China ETF at the height of China pessimism has played out very well, as China has begun surprising on the upside. Anish maintains that we will see a gradual recovery in China, led by consumption, and does not see the prospects of any big bang stimulus for struggling sectors like property.
One sector that he is closely tracking is life insurance –it has been very subdued due to regulatory concerns. Once these clouds lift, one can perhaps see sharp upticks in these stocks, and the sector may then prove to be the dark horse of FY25.
On global macros, he does not read too much into US Fed’s QT reduction. He believes we are not going to see any rate cuts in any big hurry (irrespective of political considerations) as the US Fed has been and will likely remain data dependent in its decision making. He sees no signs yet of a global reflation trade gathering momentum and maintains that global macros are unlikely to impact his sectoral outlook in Indian markets.