Mutual funds increased their allocation to oil & gas, private banks, consumer, cement, capital goods and utilities in February, shows a recent report by Motilal Oswal titled ‘Fund Folio – Indian Mutual Fund Tracker’.
Oil and gas sector has zoomed in popularity in the last one year with fund houses increasing their weightage to the sector by 1.2% year-on-year. Last month itself, mutual funds increased their allocation to the sector by 0.2% compared to January. Overall, the sector now stands fifth in terms of sector allocation by mutual funds with 7.8% weightage compared to the 12th position it was a year before. Experts attribute the increased allocation to oil and gas sector due to attractive valuation of oil marketing companies and upstream oil companies.
Upstream companies are oil companies primarily involved in exploration and production of crude oil.
Source: Motilal Oswal
Consumer goods too recorded a notable increase in weightage. Mutual funds’ allocation to the sector climbed to a new high of 8.1% in February. On a year-on-year basis, allocation to consumer goods grew by 1.4%.
Consumer goods has always been a true-blue defensive sector, said Lalit Nambiar, Executive Vice President and Fund Manager (Equity), UTI MF. "With 2018 being a volatile year and the market uncertainty likely to continue till elections, the increase in allocation to consumer goods may be a move towards safety," he added.
Source: Motilal Oswal
Meanwhile, PSU banks, chemicals, metals, NBFC and healthcare sectors saw a drop in their weightage on month-on-month basis.
Overall, private banks (18.6%) was the top sector holding for the industry in Feb ’19, followed by technology (9.5%), NBFCs (8.4%) and consumer goods (8.1%).
Source: Motilal Oswal
