Sundaram Aggressive Hybrid Fund is coming out from a 3rdquartile performance into 2nd quartile over the last 6 months. With an equity allocation of 70-75% and large cap tilt of 75-80% within this, the fund may have missed out on the small cap rally of CY23, but is well poised to harness a potential large cap rally in CY24 that many experts are forecasting.
Being a hybrid fund, the mandate for this fund is to have a large cap orientation which helps deliver smoother longer term outcomes apart from appearing attractive on a rotational play basis.
After a sharp run up in cap goods / infra / industrials sectors, margin of safety has reduced. Consumer discretionary segment looks better placed on a relative basis at present.
Bharath identifies three types of businesses which will continue to lead this bull market:
1. Companies which are investing in expansion from strong internal accruals, in businesses that are on the right side of disruption – like auto/auto ancillaries.
2. Companies in sectors which have strong policy tailwinds – like power, railways etc
3. Companies that offer lifestyle upgradation outcomes – this can include travel, hospitality, auto, home improvement etc.