Surging Returns: Business Cycle Mutual Funds Outperform Market

Business cycle mutual funds have achieved impressive gains, with top funds delivering over 50% returns in the past year. Only 16 such funds exist, with the top three outperforming the Nifty 500 TRI index significantly. These funds rotate investments based on economic phases, attracting growing investor interest.

Business cycle mutual funds have emerged as formidable contenders in the investment landscape, boasting returns of 32-56% over the past year. Standout performances came from funds by HSBC, Mahindra Manulife, and Quant, each generating over 50% returns, significantly outpacing the Nifty 500 TRI index.

Out of 16 existing business cycle funds, only three have completed a three-year term. The category's assets under management soared to Rs 37,487 crore, a dramatic increase from Rs 17,238 crore in September 2021. According to Feroze Azeez, Deputy CEO of Anand Rathi Wealth, this growth indicates rising interest among investors.

These funds adapt to different economic phases by rotating stocks from sectors expected to thrive under specific conditions. HSBC, Mahindra Manulife, and Quant funds have notably outperformed the benchmark index by 15-21 percentage points, emphasizing their robust performance even amid economic volatility.

(With inputs from agencies.)