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Here are the sub-sectors mutual funds increased exposure. Are you invested in them?

Select sub-sectors turn attractive for fund managers taking fresh positions or increased exposure in the stocks within those sectors

April 04, 2022 / 08:12 AM IST
Domestic equity markets registered roller coaster ride over the last few months due to global headwinds. Fund managers find it as a good entry point in the beaten down quality stocks and sectors. Here are the top sub-sectors wherein the mutual fund schemes either made fresh positions or increased exposure significantly in the stocks within those sectors over the last three months. Source: ACEMF.
Most of us look at sectors where fund managers invest in. But there are many segments within a sector, and only few such sub-segments or sub-sectors would do well at a given time. For instance, under banking, sometimes markets reward private-sector banks. Other times, state-owned banks could be sought after. Moneycontrol presents sub-sectors where mutual funds have increased their exposure in the month of February 2022. Market volatility has also presented fund managers a good entry point in the beaten down quality stocks and sectors. Here are the top sub-sectors wherein the mutual fund schemes either made fresh positions or increased exposure significantly in the stocks within those sectors over the last three months. Source: ACEMF.
IT – Software has been the preferred sector among investors post pandemic outbreak as businesses get increasingly digitized and invest more in technology. Software companies capitalised on the trend. Index funds seen added exposure to the sector as many IT stocks were privileged to part of the constituents of indices given their increased market capitalization and profitability. Axis Multicap, IDFC Multi Cap, HDFC Multi Cap and Invesco India Flexi Cap were few schemes increased exposure to the sectors notably over the last three months ended February 28, 2022.
IT – Software has been the preferred sector among investors post pandemic outbreak as businesses get increasingly digitized and invest more in technology. Software companies capitalised on the trend. Index funds seen added exposure to the sector as many IT stocks were privileged to part of the constituents of indices given their increased market capitalization and profitability. Axis Multicap, IDFC Multi Cap, HDFC Multi Cap and Invesco India Flexi Cap were few schemes increased exposure to the sectors notably over the last three months ended February 28, 2022.
After a prolonged underperformance, pharma sector recovered in 2020 thanks to the improved sentiment due to onset of pandemic. But it has demonstrated a docile show lately as the sentiment faded. The recent correction has given a room for fund managers to pile up select pharma stocks. Schemes such as IDFC Multi Cap, HDFC Focused 30, SBI Focused Equity and L&T Focused Equity increased their allocation to pharma sector notably in the last three months.
After a prolonged underperformance, pharma sector recovered in 2020 thanks to the improved sentiment due to onset of pandemic. But it has demonstrated a docile show lately as the sentiment faded. The recent correction has given a room for fund managers to pile up select pharma stocks. Schemes such as IDFC Multi Cap, HDFC Focused 30, SBI Focused Equity and L&T Focused Equity increased their allocation to pharma sector notably in the last three months.
While the export business for the Indian drug manufacturing companies not doing well over the last 5-7 years, companies providing healthcare services such as hospitals, diagnostic chains and insurance offered newer opportunities for fund managers. Schemes like ITI Mid Cap, Shriram Flexi Cap, Union Midcap, Canara Rob Consumer Trends and Axis Multicap Fund upped their position in the sector.
While the export business for the Indian drug manufacturing companies not doing well over the last 5-7 years, companies providing healthcare services such as hospitals, diagnostic chains and insurance offered newer opportunities for fund managers. Schemes like ITI Mid Cap, Shriram Flexi Cap, Union Midcap, Canara Rob Consumer Trends and Axis Multicap Fund upped their position in the sector.
The Nifty PSU Bank index managed to outpace the Nifty 50 in 2021, thanks to the turnaround in the profitability of PSU banks. Among the diversified funds, ITI Multi-Cap, Quant Value, ITI Long Term Equity, ITI Small Cap and Mahindra Manulife Balanced Advantage Yojana increased their position in the sector.
The Nifty PSU Bank index managed to outpace the Nifty 50 in 2021, thanks to the turnaround in the profitability of PSU banks. Among the diversified funds, ITI Multi-Cap, Quant Value, ITI Long Term Equity, ITI Small Cap and Mahindra Manulife Balanced Advantage Yojana increased their position in the sector.
The BSE Realty Index crossed the 4,000 mark recently. Stocks of real estate players made a strong comeback in recent months, thanks to the robust residential sales in the October- December quarter and a strong launch pipeline in the March quarter. Experts believe the low interest-rate regime, rock bottom home loan rates, stable residential prices, and continuing work-from-home trend are the key triggers driving residential affordability. Schemes such as Taurus Tax Shield, ITI Small Cap, Taurus Infrastructure, Taurus Largecap Equity and ITI Value increased exposure to the sector.
The BSE Realty Index touched the 4,000 mark recently. Stocks of real estate players made a strong comeback in recent months, thanks to the robust residential sales in the October- December quarter and a strong launch pipeline in the March quarter. Experts believe the low interest-rate regime, rock bottom home loan rates, stable residential prices, and continuing work-from-home trend are the key triggers driving residential affordability. Schemes such as Taurus Tax Shield, ITI Small Cap, Taurus Infrastructure, Taurus Largecap Equity and ITI Value increased exposure to the sector.
Chemical stocks have put-up a strong show over the last year. Experts believe Indian chemical companies are likely to gain market share due to put-up a strong show seeing the favorable factors like supportive government policies, lowest tax rates in the world for manufacturing and tougher environmental norms. ITI Mid Cap, Union Small Cap, HDFC Multi Cap and Union Midcap Fund were few schemes accumulated the shares of chemical companies over the last three months.
Chemical stocks have put-up a strong show over the last year. Experts believe Indian chemical companies are likely to gain market share seeing the favorable factors like supportive government policies, India's lowest tax rates in the world for manufacturing and tougher environmental norms in China. ITI Mid Cap, Union Small Cap, HDFC Multi Cap and Union Midcap Fund were few schemes accumulated the shares of chemical companies over the last three months.
After tepid years, India’s textile sector has now back on the growth track, driven by improving export demand. Schemes such as SBI Magnum Children's Benefit Fund-Savings, SBI Consumption Opp, SBI Small Cap, Taurus Ethical and Invesco India Midcap Fund increased their allocation to the sector.
After tepid years, India’s textile sector has now back on the growth track, driven by improving export demand. Schemes such as SBI Magnum Children's Benefit Fund-Savings, SBI Consumption Opp, SBI Small Cap, Taurus Ethical and Invesco India Midcap Fund increased their allocation to the sector.
Stocks of private sector banks have been under pressure for the last 15-18 months. Persisting concerns over asset quality, lack of credit growth and growing bond yields made foreign investors exit them. However, mutual funds were attracted towards select private banks like Axis Bank, ICICI Bank and Bandhan Bank. Schemes like Aditya Birla SL Business Cycle, ICICI Pru Retirement Fund-Pure Equity and HDFC Multi Cap Fund upped their position in the sector.
Stocks of private sector banks have been under pressure for the last 15-18 months. Persisting concerns over asset quality, lack of credit growth and growing bond yields made foreign investors exit them. However, mutual funds were attracted towards select private banks like Axis Bank, ICICI Bank and Bandhan Bank. Schemes like Aditya Birla SL Business Cycle, ICICI Pru Retirement Fund-Pure Equity and HDFC Multi Cap Fund upped their position in the sector.
Though the negative factors like rising inflation and impact from the pandemic cause of concern, mutual funds bet on the selective FMCG players including Jubilant FoodWorks, Marico and Britannia Industries. ICICI Pru Quant, Aditya Birla SL Business Cycle, Tata Quant and Union Focused Fund were few schemes upper their holding in the sector significantly during the last three months.
Though the negative factors like rising inflation and impact from the pandemic cause of concern, mutual funds bet on the selective FMCG players including Jubilant FoodWorks, Marico and Britannia Industries. ICICI Pru Quant, Aditya Birla SL Business Cycle, Tata Quant and Union Focused Fund were few schemes upper their holding in the sector significantly during the last three months.
The financial services sector has been registering phenomenal growth, thanks to the banking regulator's inclusion of new entities with diversified businesses such as payment banks. Schemes like Aditya Birla SL Business Cycle, Samco Flexi Cap, Axis Multicap, ITI Large Cap and Axis Growth Opp Fund increased allocation to the sector during the period.
The financial services sector has been registering phenomenal growth, thanks to the banking regulator's inclusion of new entities with diversified businesses such as payment banks. Schemes like Aditya Birla SL Business Cycle, Samco Flexi Cap, Axis Multicap, ITI Large Cap and Axis Growth Opp Fund increased allocation to the sector during the period.
Dhuraivel Gunasekaran
first published: Apr 4, 2022 08:12 am
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