MFs raise stakes in private banks, oil & gas; cut back on capital goods, technology

HDFC Bank saw the highest month-on-month gain in fund value, rising Rs 15,700 crore, followed by ICICI Bank which increased by Rs 1182 crore

Mutual funds increased their investments in sectors like private banks, oil & gas, automobiles, consumer goods, telecom, retail, insurance, chemicals, and real estate in April, according to Motilal Oswal’s MF Fund Folio report. Meanwhile, they cut exposure to capital goods, technology, NBFCs, utilities, metals, and cement. The Nifty gained 3.5 percent during the month, its second straight monthly rise and the second-best performance in the last nine months.

Weightage of private banks rose to a 20-month high of 18.9 percent, up by around 50 basis points month-on-month and 170 basis points year-on-year. Oil & gas also saw increased allocation for the second month in a row, rising to an eight-month high of 6.4 percent. In contrast, technology stocks continued to face selling pressure, with sector weight falling to 8.3 percent, marking the third consecutive monthly drop. Capital goods also saw reduced interest, with allocation down to 6.9 percent.

Also read: MF flows in April: Equity Funds see 50th straight month of inflows; SIPs hit new record high

Healthcare topped the list of over-owned sectors, with 17 funds holding more than index weights. Capital Goods, Retail, and Chemicals followed with 10 funds each showing overweight positions and Consumer Durables attracted overweight positions from 9 funds. On the other hand, Consumer was the most under-owned sector (19 funds), followed by Oil & Gas (17 funds), Private Banks (15 funds), Utilities (12 funds), and Technology (11 funds).

In terms of value, the report noted that most banking names saw an increase in value. HDFC Bank saw the highest month-on-month gain in fund value, rising Rs 15,700 crore, followed by ICICI Bank, which increased by Rs 1182 crore, Axis Bank ( increased by Rs 8110 crore), and IndusInd Bank ( increased by Rs 3,600 crore). On the other hand, value declines were seen in stocks such as Siemens (decline of Rs 3440 crore), Larsen & Toubro (L&T) (decline of Rs  2,740 crore), Bajaj Finance (decline of Rs 2,350 crore), Infosys (decline of Rs 2,200 crore), and Voltas (decline of Rs 1,940 billion).

In April,  the mutual fund industry’s total assets under management (AUM) hit a new high of Rs 70 lakh crore, up 6.5% MoM.