The monsoon is here, and as the met-eorological department has predi-cted normal rains, it may be time to re-align your portfolio and benefit from the showers. While one could directly relate the monsoon to better sales for companies manufacturing umbrellas and rain wear, there are many other areas one could invest in. DNA Money spoke to experts on investment options that help one take advantage of the rains.

Most of them suggest betting on farmers and the higher crop yield that could fetch them earnings. "If the monsoon is good, then the purchasing power of the rural masses increases. The farmer's wealth increases. It would have percolation effect," said D D Sharma, senior VP-research at Anand Rathi Securities. Sharma said a good monsoon would see increase in the consumption of consumer goods and other daily consumable items as well as better sales for the FMCG sector. "Even two wheelers and small cars could see higher demand," he added. To buy these goods or vehicles, some farmers may take the help of bankers and hence, that sector too looks green. Gopal Agrawal, head of equity at Mirae Asset Global Investments said: "If domestic demand is good, then credit offtake will start and liquidity will tighten. Banks do well in a tightening environment. Also, if agriculture sector does well, then credit offtake (loans being given) for auto and home loans will be much better."

In India, trading in commodities is not for the pockets and risk appetite of the aam aadmi, so Vijay Bhambwani, chief executive officer, bsplindia.com, suggests agri-company stocks. "One can invest in stocks of companies benefiting from the farming sector such as tractors, seeds, irrigation etc. But here one is taking a quasi approach of investing in the equity of companies benefiting from the sector," Bhambwani said. Raamdeo Agrawal, MD of Motilal Oswal Securities, said: "There might also be an indirect impact. For instance if sugar and wheat prices reduce, then biscuits-manufacturers will look good. Paint- and cement-making companies too will benefit." Raunak Roongta, a Mumbai-based personal financial planner, said the banking and auto sectors are the first to indicate monsoon benefits. "One must look for quality mid-caps in these sectors, including auto ancillary," he said. Roongta cautions that investors need to be selective.

For example, said Raamdeo Agrawal, within the auto sector, two-wheeler makers may be a better bet. "The additional demand will be for automobiles used in rural areas. So, cars are not rural, but motorcycles are," he said. The gains that companies make during the monsoon or as a result of it will be seen over a period. "Though commodity prices may jump, the same would reflect in the company's bottomline with a minimum two quarters lag," said Bhambwani. Mutual funds also present opportunities for investors looking to take advantage of the monsoon. Certain funds have the objective of investing in commodities. Most, however, are linked to global commodities and invest in offshore global commodity oriented funds. Sundaram BNP Paribas Mutual Fund has a Rural India Fund. Under mutual funds, Roongta, said, "Funds that have a quality portfolio of mid-caps should be selected. Do not go for momentum portfolios."

Momentum portfolios refers to a collection where stocks rapidly move either up or down and are not stable return generators.

Suresh Sadagopan, a certified financial planner, suggests investors take a look at funds with themes such as agriculture, FMCG, automobiles. However, this is a double-edged sword: "Monsoon itself is not predictable and sectoral funds are high risk. So, these funds are suggested only for people with high risk appetite," he said. Sadagopan suggests that not more than 10-15% of a portfolio be invested in these funds.