Why this fund manager is bullish on the manufacturing theme
Which sectors are you bullish on, and which would you avoid?
Let me start with caution. IT rallies reflexively whenever global semiconductors sell off, on the same AI/anti-AI trade, but that isn’t a reason to own it, because quarter-on-quarter growth momentum still hasn’t returned. The AI-deployment piece is growing fast, but it’s a small slice of revenue; the bulk is legacy software development, which is deflating. Consumer staples remain weak, though turning slightly. And in pockets that have run very hard—power, auto ancillaries, defence, electronics manufacturing—be selective. Power is the clearest example: prices now bake in billions of dollars of data-centre orders that haven’t arrived, and companies that can’t meet those expectations are being de-rated quickly. We like power as a long-term cyclical theme, but at today’s prices, you have to question it.
