Look how fund managers are taking position on D-Street ahead of polls

In the private banking space, Axis Bank stood among the most preferred stocks in February.

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MFs’ equity exposure to consumer and oil & gas sectors jumped to an all-time high in February.
NEW DELHI: It’s election season again in the country, and it is customary for investors and money managers to customise their portfolios to make the most of any rally in the run-up to the polls.

In February, the mutual fund industry was bullish on consumer and oil & gas themes, as its equity exposure to the sectors jumped to an all-time high of 8.10 per cent and 7.8 per cent, respectively.

The managers further increased their weightage to private banks, cement, capital goods as well as utilities space last month on a month-on-month basis.


However, they moderated their exposure to PSU banks, healthcare, NBFCs, metals, and chemical spaces, according to a report by Motilal Oswal Financial Services.

From the oil and gas segment, Reliance Industries (RIL) witnessed an increase of Rs 1,773 crore in total holding last month despite flat performance registered by the oil-to-telecom major. Shares of RIL saw net buying by 17 mutual funds of the top 20.

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In the private banking space, Axis Bank stood among the most preferred stocks with net buying by 19 funds. The total exposure of the mutual funds’ in the bank increased by Rs 2,100 crore in February. This was despite the fact that stock corrected by 1.90 per cent.
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Kotak Mahindra Bank also remained on money managers’ radar with net buying by 15 funds, the report added.

In terms of market value, exposure of mutual funds in Kotak Mahindra Bank increased to Rs 19,354 crore from Rs 17,310 crore on a sequential basis. The stock of the bank was down 3 per cent in February.

However, as many as five funds sold State Bank of India, while 13 funds added the public lender.

Meanwhile, net inflows into equity mutual funds slumped 68 per cent to Rs 5,122 crore last month against Rs 16,268 crore last year amid market volatility.

February also marked the fourth straight month of decline in net investment into equity MFs, according to a data by Association of Mutual Funds in India (Amfi).
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The assets under management (AUM) for the industry stood at Rs 23.16 lakh crore as against Rs 23.4 lakh crore at the end of January.

February was a difficult month for the stocks due to tensions between India and Pakistan.

However, inflows by foreign institutional investors capped the downside. As a result, BSE Sensex dipped only 1 per cent, while 84 per cent of the top 25 mutual fund schemes closed lower on a montly basis.

Table 3

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