Private banks continue to remain the biggest overweight (OW) for equity mutual funds (MFs), although the OW stance has come off its peak. At present, 25 per cent of MF investments in Nifty stocks are in private banks. Telecom, utilities, and healthcare are other top weights for MFs. On the other hand, oil & gas has been the biggest underweight (UW). The sector has 16.7 per cent in the Nifty. However, its MF allocation is just 12.2 per cent.
Experts say the UW stance is on account of Reliance Industries (RIL). “RIL’s weight in the index is nearly 15 per cent. However, the stock remains under-owned, partly due to technical factors,” said a fund manager. Fast moving consumer goods (FMCG) is another space fund managers are underweight on. Experts say the stance stems from valuation and growth concerns. MFs have pruned their holdings in the non-banking financial companies (NBFC) too, going 240 basis points (bps) underweight.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.