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SEBI data shows that equity mutual funds deploy close to 64% of their total corpus in five sectors. They are largely skewed towards financial services, which account for 31% of the total equity MF AUM.
The second highest allocation was in the consumer discretionary sector at 11%. Information technology, healthcare and industrials are next in line with allocation of 10%, 6% and 6%, respectively.
|
Sector |
Percent |
|
Financial Services |
31.20% |
|
Consumer Discretionary |
10.60% |
|
Information Technology |
9.80% |
|
Healthcare |
6.10% |
|
Industrials |
6.00% |
|
Rest of Sectors |
36.30% |
|
Total |
100.00% |
Citing this to be in line with index composition, Christy Mathai, Fund Manager - Equity, Quantum MF explained, “If we look at any index, narrow as well as broad-based, these sectors find a major representation there. For instance, the financial sector forms close to 42% of BSE Sensex and 31% of BSE 500 as on May 2023. Likewise, consumer discretionary which comprises around 6% of BSE Sensex has a 10% representation in BSE 500. Broadly speaking, these five sectors largely encompass the investment universe within which the fund managers pick and choose their portfolio.”
Sharing similar views, Rahul Singh, CIO - Equities, Tata MF added, “Financial, consumption and IT are a large part of the economy, thus a large part of indices and investment portfolios. However, portfolio creation goes beyond sectoral weights. It is more about evaluating the fundamentals and picking the right stock within these sectors.”
