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Last Updated : Jul 20, 2019 06:20 PM IST | Source: Moneycontrol.com

MF Wrap: Banking is the top pick for fund houses in June; here are other sectors that made it to their shopping list

Life insurance and general insurance companies offered promising opportunities

Himadri Buch @himadribuch

Asset managers continued to gather shares of banks for the ninth straight month in June, according to Securities and Exchange Board of India (SEBI) deployment data.


The funds deployed 24.78 percent of their equity assets under management (AUM) into the banking sector, the highest allocation to any sector. The exposure to banks stood at 24.46 percent in May. Financials was the next biggest sector on fund houses' shopping list.

Fund managers attributed the increasing interest in bank shares, particularly in private banks shares, to adequate provisioning and fewer concerns over incremental slippages from select leveraged accounts which may see a sharp improvement in return going ahead.


The data released on the website of SEBI showed that 43 mutual funds had invested Rs 2,76,819 crore in bank stocks in June. 


Generally, banking is the most preferred sector with fund managers as they cannot take a bearish call on the banking sector, given the sector’s 35 percent weight in the S&P BSE index.


After banks, finance was the second-most preferred sector. Equity fund managers’ deployment in finance stocks (9.68 percent) was at Rs 108,171 crore followed by software (Rs 96,594 crore), consumer non-durables ( Rs 81,538 crore) and pharmaceuticals  (Rs 54,075 crore).


According to most fund managers, life insurance and general insurance companies offered promising opportunities due to high growth driven by low penetration and increasing financialisation of savings.



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First Published on Jul 20, 2019 06:20 pm
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