Nimesh Shah: Why do we come with so many thematic funds? We believe mutual funds or funds of funds are a great way to invest in thematic funds. I started something called a thematic advantage fund. He has a good track record.
Suppose you have an opinion on a sector that should perform well, perhaps the banking sector. The investor must make the entry and exit decision. And when it comes out, let’s say it invests in two months, the returns come in two to three months, and you’ll have to pay the full capital gains tax. Short-term capital gains will have to be paid on it.
We have launched a thematic fund of funds in which we will decide in which themes to invest. We will invest in categories that are part of the business. So I have all the themes in the business.
Banking is a good space to invest in as private sector banks are well positioned. Their balance sheets are healthy and the credit cycle will recover. Even if interest rates rise, private sector banks will be able to handle NIIs well. They have a huge market to take in the entire banking system of the country. So if we believe that, then there will be a huge allocation in Thematic Advantage in the bank funds themselves. Assuming the bank is doing very well over the next two months, I can reduce the weighting of the bank fund.
Thematically, we like our pharma fund. We created the pharmaceutical fund after four years of underperformance. The pharmacy hadn’t done well from 2016 to 2019. Then we created this fund and it did well. After a bad commodity cycle for four to five years, we created the commodity fund, which has delivered incredible returns over the past two years.
For an aggressive investor looking to invest in stocks and themes, there’s nothing better than Thematic Advantage Fund. It’s a fund of funds that invests in themes, and we’ll decide the entry and exit point. As fund managers, we have created internal models.
I like banking today; it fixed a lot. Automotive is another sector that hasn’t done well over the past couple of years and it’s another sector we like. We also like housing and believe that real estate will do very well. For seven to eight years, real estate has not been doing well. Over the past year, real estate has started to pick up. The inventory in the country has gone down a lot. Unsold stocks are at their lowest. We like everything after the underperformance.
Either you will invest in houses yourself, but if you don’t want to, you can invest in the ICICI Housing Prudential Fund. It will not only invest in real estate companies, but also in everything related to housing – including cement, steel, various industries that are benefiting from India’s housing growth and banks that are doing good business thanks to loans.
Overall, it’s pretty well diversified because you have banks, steel companies, and various sectors, including cement, which should do well. All these sectors are present in the fund. It’s a great opportunity. We launched the fund yesterday. Over the next 14-15 days, the NFO will be offering ICICI Prudential Housing Fund.