Banks, IT, auto firms get a third of total Mutual Funds

Mumbai: Banks, software and auto stocks have received the highest amount of investment from domestic mutual funds till date. The three sectors account for almost 37 per cent of the industry’s asset under management (AuM).

Out of their total investment of Rs 3.82 lakh crore in the Indian equity markets, fund houses have invested a total of Rs 78,581.67 crore in bank stocks as at the end of June 2015, which accounts for 20.54 per cent of the industry’s total AuM.

IT firms have received the second highest investment totalling Rs 35,409.54 crore, which constitutes 9.26 per cent of the total equity market investment.  

One of the reasons cited by fund managers for the high concentration of investment in these three sectors is because of their high weightage in leading equity indices like Sensex, Nifty and BSE 500. According to fund managers, banking sector stocks have a weightage of about 25-30 per cent, software firms enjoys a weightage of around 12-15 per cent and auto sector has a weightage of 7-10 per cent.

“When compared to bank stocks weightage in the index, fund houses are actually little underweight on banking sector at the moment because of slower credit growth and high stress levels in the system especially in the public sector banks,” said S Krishnakumar, chief investment officer (CIO), equity at Sundaram MF.