Did your mutual fund outperform the market significantly thus far in 2012? It perhaps held more stocks from high-beta sectors. Unlike the past couple of years, when FMCG and pharma sectors dominated the sector returns chart, high-beta sectors such as banks, realty and capital goods have been major out performers this year till date. Of course, these sectors did under perform considerably in 2011. Many stocks in these sectors were trading at single-digit price earnings valuations.
But the defensives – pharma and FMCG were not left behind. They still managed to beat the Sensex by a good margin, as suggested by their respective BSE indices in the chart given above.
The current earnings season will tell whether the defensive sectors can continue to command the premium valuations they do at present and whether the cyclical sectors will see some earnings upgrade.
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