Nifty FMCG vs Nifty Finance: Which sector has better long-term investment opportunities?
Varun Beverages has gained the most almost 15 percent followed by Godrej Consumer, up 10 percent, and Tata Consumer, up 5 percent. Meanwhile, Radico Khaitan, Colgate-Palmolive and United Spirits also gained between 1.5-4 percent each in this time. However, Emami was the top loser, down 17.6 percent in 2024 YTD followed by ITC, down 13 percent, and HUL, down 11.3 percent.
Britannia, Nestle, P&G Hygiene and Marico also shed over 5 percent each. Dabur and United Breweries also fell 2.4 percent and 1.6 percent, respectively. Meanwhile, in the Nifty Finance index, 45 percent (9/20 stocks) constituents were in the green.
LIC Housing jumped the most, over 20 percent followed by HDFC AMC, Shriram Finance, SBI, and ICICI Lombard, which rose over 15 percent each. However, HDFC Bank was the top loser, down over 17 percent followed by IEX and Chola Finance, which fell over 10 percent each. SBI Cards, Bajaj Finserv, Muthoot Finance, Kotak Bank, HDFC Life, and Bajaj Finance also lost over 5 percent each.
Apurva Sheth, Head of Markets Perspectives & Research, SAMCO Securities prefers Nifty FMCG over Nifty Finance. The 10-year CAGR of Nifty FMCG and Nifty Finance indices are 12.2 percent and 16.1 percent respectively. Their drawdowns from all-time highs during the same period are 19.3 percent and 31.32 percent, respectively. If one looks purely from an absolute returns perspective then Nifty Finance ranks higher with better returns.
However, when you look from a risk-adjusted basis, Nifty FMCG looks better with a higher CALMAR ratio of 0.63 compared to 0.51 of Nifty Finance. CALMAR is the average annualised returns divided by Max drawdown. Tanvi Kanchan, Head – UAE Business & Strategy, Anand Rathi has also picked Nifty FMCG. Nifty FMCG
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