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Weekly Briefs, Windmill Capital Desk

Weekly Briefs, Windmill Capital Desk
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Sector Weightage – Value & Momentum smallcase

The above table displays the sectoral weightage in the Value & Momentum smallcase across the last 1 year (5 previous rebalances).  Since this is a model smallcase, all of these sectors get self-selected into the smallcase. Let’s discuss the key trends to understand what’s been working in the markets.

  1. Industrials – Check out the weightage of Industrials in the smallcase. From 26.7%, in March ‘23, it went up to 40% in June ‘23 and then back to the previous figure. The reason behind that was the sudden price strength that was to be seen in the sector, especially railways and infrastructure post the ambitious capex push from the government in the Union Budget. In fact, one of the industrial companies, Apar Industries, in the smallcase has become 3x bagger in the last one year. 
  • Materials – Well this sector saw weightage go from 20% to 0% in this time period. Why so? Because under materials we held chemicals and mining & metals companies which have lost sheen in recent times. Unless, there is price strength or any fundamental/policy boost, sectors find it hard to sustain their weightage in the smallcase.
  • Consumer Discretionary – Quite the reverse has transpired with this sector. As you would know, there are various sub-sectors in the consumer discretionary space. For our smallcase, the majority of these weights were allocated to auto and auto ancillaries given the green shoots in the sector. Car sales have been very robust over the past six months on account better discounts and overall environment.

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Weekly Briefs, Windmill Capital Desk
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