While the weight of private banks moderated for the fourth consecutive month to 18.7%, the weight of PSU banks declined to 3% to its lowest since February 2021.
Here’s how India’s 5 largest mutual fund houses tweaked their equity portfolios last month:
SBI Mutual Fund
India’s largest money manager SBI Mutual Fund, which handles assets worth Rs 539,200 crore in the equity segment alone, was seen picking Canara Bank, Nazara Tech, Shriram Finance, Sundaram Fasteners and Dr Lal Pathlabs as new entrants. Major reductions included Kotak Mahindra Bank, SBI and Axis Bank while Alembic was a complete exit.
Top holdings at the end of October include HDFC Bank, ICICI Bank, RIL, Infosys and L&T.
ICICI Prudential MF
ICICI Prudential Mutual Fund maintained ICICI Bank as its top bet followed by HDFC Bank and Infosys. During the month, new picks included Bank of Baroda, Laxmi Organic and CIE Automotive. The fund house also added more of ICICI Bank, Kotak Bank and Infosys while reducing stake in Cholamandalam Finance, Coal India and LIC Housing Finance.HDFC MF
With Rs 279,800 crore worth of equity assets under its belt, HDFC Mutual Fund added more of Kotak Mahindra Bank, Power Grid and Apollo Hospitals during the month. UPL and JSW Energy were two new additions to its portfolio. On the other hand, prominent reductions were ONGC, Cholamandalam Invest and Tata Communication.
HDFC MF’s top bets in the midcap space include Indian Hotels, Federal Bank and Coforge.
Nippon India MF
Nippon also turned bullish on banks by picking more of ICICI Bank and HDFC Bank. It also added more of Bharti Airtel while reducing stakes in Bank of Baroda, RIL and L&T.
New picks include Indus Towers, Hitachi Energy and BPCL. On the other hand, the fund house made complete exit in HPCL, Intellect Design and NMDC Steel.
UTI MF
UTI Mutual Fund, whose equity AUM stood at Rs 185,100 crore at the end of the month, bought GMM Pfaudler, Latent View, Nazara Tech and Happiest Minds as new picks during the month and exited Minda Corp, Orient Electric and IDFC.
The fund house’s portfolio strategy has a bias towards financials with private banks forming about 24% of the weight.
What should investors do?
Other than worries related to rich valuations, geopolitical worries, central bank actions and the election season could keep market volatility elevated in the near term.
“We are still overweight cyclicals (industrials, property, banks) as we believe the long awaited turn in Indian corporate capex is well underway, which combined with a strong housing cycle, should deliver strong earnings growth. We would look to raise weight on cyclicals once the near-term political uncertainties subside,” Jefferies analyst Mahesh Nandurkar said.
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