Infra, PSU, mid and smallcap MFs biggest gainers in Modi 2.0

Infrastructure, PSU, mid-cap, and smallcap mutual funds have delivered the highest returns for investors during the second tenure of the Modi government from May 2019 to June 2024.

The rise in PSU stocks came as investors fancied stocks in some segments like railways and defence. After a long period of underperformance, the banking NPA cycle turned around, and with the core economy doing well, valuations turned reasonable.

The government also focused on strategic stake sales, which improved investor sentiment towards PSU companies. The presence of many mid-cap and small-cap companies in niche segments like infrastructure, chemicals, capital goods and consumer discretionary, which delivered higher profitability and earnings growth saw their stocks gain more than benchmark indices.