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Top of the mind: Ten sub-sectors fund managers weigh while drawing MF blueprint

Active fund managers sense the sectoral shifts early and reposition their portfolios accordingly. These are their top preferred sub-sectors

September 09, 2022 / 03:00 PM IST
In a bull market a few sectors lead and a few lag. Getting the sectors right can help you stay ahead of the crowd. In the last one year, certain sectors such as TV Broadcasting, Airlines, Hotels, Automobiles and Bearings Industries gained attention of the investors, whereas many stocks under Batteries, Tea/Coffee and Gas Transmission/Distribution went out of favour. Active fund managers sense these changes early and reposition their portfolios, accordingly. Here, we have looked into the sub-sectors of the primary sectors that the mutual funds invested in. For instance, the sub-sectors under the financial services sector include NBFCs, insurance companies, AMCs and broking companies. Here are the top 10 favourite sub-sectors of mutual funds as of July 31, 2022. Only actively managed equity schemes and hybrid schemes (except arbitrage funds) are considered for compilation. AMCs mentioned in the following slides had assigned relatively higher weightage to the sector in many of the schemes they manage. (Source: ACEMF).
In a bull market a few sectors lead and a few lag. Getting the sectors right can help you stay ahead of the crowd. In the last one year, certain sectors such as TV Broadcasting, Airlines, Hotels, Automobiles and Bearings Industries gained attention of the investors, whereas many stocks under Batteries, Tea/Coffee and Gas Transmission/Distribution went out of favour. Active fund managers sense these changes early and reposition their portfolios, accordingly. Here, we have looked into the sub-sectors of the primary sectors that the mutual funds invested in. For instance, the sub-sectors under the financial services sector include NBFCs, insurance companies, AMCs and broking companies. Here are the top 10 favourite sub-sectors of mutual funds as of July 31, 2022. Only actively managed equity schemes and hybrid schemes (except arbitrage funds) are considered for compilation. AMCs mentioned in the following slides had assigned relatively higher weightage to the sector in many of the schemes they manage. (Source: ACEMF).
Following banks putting up a tepid show on concerns over asset quality and lack of credit growth, many private sector bank have staged a comeback with strong results over the last few quarters. Asset Management Companies (AMCs) which made higher allocations to the sector include PPFAS MF, Quant MF and Invesco MF.
Following banks putting up a tepid show on concerns over asset quality and lack of credit growth, many private sector bank have staged a comeback with strong results over the last few quarters. Asset Management Companies (AMCs) which made higher allocations to the sector include PPFAS MF, Quant MF and Invesco MF.
Though IT stocks were among the worst performers in the last six months, mutual funds prefer holding selective stocks as they are known for their strong balance sheets and healthy earnings growth. Fund houses like PPFAS MF, Tata MF and Franklin Templeton MF had meaningful exposure to the sector, among peers.
Though IT stocks were among the worst performers in the last six months, mutual funds prefer holding selective stocks as they are known for their strong balance sheets and healthy earnings growth. Fund houses like PPFAS MF, Tata MF and Franklin Templeton MF had meaningful exposure to the sector, among peers.
After prolonged underperformance, the pharma sector recovered in 2020, thanks to improved sentiments due to the onset of the pandemic. But it put up a lacklustre show lately as the sentiment faded. The recent correction has given room for fund managers to pile up select pharma stocks. Motilal Oswal MF, Mirae MF and SBI MF allocated notably to the sector.
After prolonged underperformance, the pharma sector recovered in 2020, thanks to improved sentiments due to the onset of the pandemic. But it put up a lacklustre show lately as the sentiment faded. The recent correction has given room for fund managers to pile up select pharma stocks. Motilal Oswal MF, Mirae MF and SBI MF allocated notably to the sector.
Mutual funds upped their holdings in financial services stocks in the last one year, and are likely to benefit from the improving economic activity and consumer demand pick-up in India. Fund houses such as PPFAS MF, Axis MF and Motilal Oswal MF had significant allocation to the sector as of July 2022.
Mutual funds upped their holdings in financial services stocks in the last one year, and are likely to benefit from the improving economic activity and consumer demand pick-up in India. Fund houses such as PPFAS MF, Axis MF and Motilal Oswal MF had significant allocation to the sector as of July 2022.
Reliance Industries has been the top among the stocks within the refinery sector. Fund houses including Invesco MF, Tata MF, Sundaram MF and Aditya Birla SL MF allocated relatively higher to the sector.
Reliance Industries has been the top among the stocks within the refinery sector. Fund houses including Invesco MF, Tata MF, Sundaram MF and Aditya Birla SL MF allocated relatively higher to the sector.
PSU banks have done well over the last few quarters thanks to the improved asset quality and operating performance. AMCs like Mirae MF, Canara Robeco MF, SBI MF and HDFC MF allocated relatively higher to the sector.
PSU banks have done well over the last few quarters thanks to the improved asset quality and operating performance. AMCs like Mirae MF, Canara Robeco MF, SBI MF and HDFC MF allocated relatively higher to the sector.
Despite weakness in domestic investment, many engineering construction companies have demonstrated good prospects, thanks to the strong project pipeline. Franklin Templeton MF, Canara Robeco MF, Aditya Birla SL MF and ICICI Pru MF bet on this sector.
Despite weakness in domestic investment, many engineering construction companies have demonstrated good prospects, thanks to the strong project pipeline. Franklin Templeton MF, Canara Robeco MF, Aditya Birla SL MF and ICICI Pru MF bet on this sector.
Major telecom stocks have underperformed against the Nifty index over the last six months. Experts believe that these companies are expected to benefit from the rise in demand due to increased data consumption. ICICI Pru MF, Franklin Templeton MF and SBI MF made higher allocations to the sector.
Major telecom stocks have underperformed against the Nifty index over the last six months. Experts believe that these companies are expected to benefit from the rise in demand due to increased data consumption. ICICI Pru MF, Franklin Templeton MF and SBI MF made higher allocations to the sector.
Larger players in cement sector are well-placed to benefit from rising demand and better pricing due to pick-up in new real estate projects and increased manufacturing capex. AMCs like Quant MF, Motilal Oswal MF, Mahindra Manulife MF and PGIM India MF had considerable allocation to the sector.
Larger players in cement sector are well-placed to benefit from rising demand and better pricing due to pick-up in new real estate projects and increased manufacturing capex. AMCs like Quant MF, Motilal Oswal MF, Mahindra Manulife MF and PGIM India MF had considerable allocation to the sector.
Passenger car manufacturers gained attention due to their improved prospects on the back of new launches, robust demand and easing supply worries. UTI MF, ICICI Pru MF, Kotak MF and Canara Robeco MF were some of the fund houses which allocated relatively higher to the sector as of July 31, 2022. Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary. Disclaimer: Moneycontrol.com advises users to check with certified experts before making any investment decisions.
Passenger car manufacturers gained attention due to their improved prospects on the back of new launches, robust demand and easing supply worries. UTI MF, ICICI Pru MF, Kotak MF and Canara Robeco MF were some of the fund houses which allocated relatively higher to the sector as of July 31, 2022.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Disclaimer: Moneycontrol.com advises users to check with certified experts before making any investment decisions.
Dhuraivel Gunasekaran
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