Exploring the Emerging Theme of Export-Focused Mutual Funds
Introduction: The world of mutual funds is evolving, with new themes coming to the forefront as investors seek lucrative opportunities. A fresh theme gaining traction in the stock market is ‘export’. Recently, HSBC Mutual Fund introduced the ‘HSBC India Export Opportunities Fund’, aimed at investing in companies that significantly benefit from exporting goods and services. One standout in this domain is the ‘ICICI Prudential Exports and Services Fund’, boasting over a decade of remarkable performance with returns exceeding 20%. As the trend unfolds, other fund houses are likely to create similar investment strategies.
India’s Export Landscape
India has emerged as one of the fastest-growing service-exporting nations on a global scale. With a target of achieving US$2 trillion in exports by 2030, the country is on a robust growth trajectory. Notably, India’s exports are increasing at 15% annually, while the nominal GDP is growing at a rate of 10%. This growth creates a fertile ground for mutual funds focusing on export-driven companies.
Top Export-Oriented Smallcap Stocks
Below is a comprehensive table outlining ten smallcap stocks with a significant portion of their revenue stemming from exports. Mutual fund schemes have also shown considerable interest in these equities, with substantial investments as of August 31, 2024.
| Company Name | Export Contribution (%) | Active Mutual Fund Schemes | Industry Sector |
|---|---|---|---|
| Birlasoft | 60% | 94 | IT – Software |
| Suven Pharmaceuticals | 58% | 90 | Pharmaceuticals and Biotechnologies |
| Zensar Technologies | 42% | 88 | IT – Software |
| Aster DM Healthcare | 35% | 278 | Health Care Services |
| Gokaldas Exports | 35% | 83 | Textiles and Apparels |
| RateGain Travel Technologies | 32% | 99 | IT – Software |
| Granules India | 26% | 95 | Pharmaceuticals and Biotechnologies |
| Orchid Pharma | 26% | 81 | Pharmaceuticals and Biotechnologies |
| Swan Energy | 25% | 85 | Diversified |
| Firstsource Solutions | 24% | 100 | Commercial Services and Supplies |
Conclusion
The focus on export-oriented mutual funds is not just a passing trend but a reflection of India’s increasing prominence in global trade. As the nation aims for ambitious export targets, investors may find valuable opportunities within these specialized funds and the underlying companies. As more fund houses explore similar themes, the investment landscape is set to become increasingly competitive, providing a host of options for savvy investors aiming to capitalize on India’s export growth.
