Select segments within PSU theme could outperform amid economic uptick

Public-sector banks, defence stocks could do well; PSUs exposed to commodities are at risk

PSU (public sector unit) thematic funds have given investors a category average return of 24.7 per cent year-to-date (YTD), compared to the Nifty 50 total return index’s (TRI) YTD 5.8 per cent. A large part of this performance has come over the past three months when the category rose 13.3 per cent on an average.

Riding the economic recovery

PSU stocks are largely present in the core sectors of the economy and are procyclical. “When an economic uptick happens, as is currently the case, they do well,” says Dhimant Kothari, fund manager, Invesco Mutual Fund.

He adds that if the