Domestic fund managers are shifting their portfolio exposure away from growth stocks to defensive bets. They now own one defensive stock for every three in their portfolios. Their allocation to the stocks from sectors including consumer, healthcare, telecom, technology, and utility companies reached a multi-quarter high of 35.5% in May 2020, an increase of 810 basis points from the December 2019 quarter, according to the data compiled by Motilal Oswal.
The consumer and healthcare sectors together formed 50% of the defensive exposure of mutual funds in May 2020. The consumer stocks accounts for 9.8% of the total weight while the weight of healthcare stocks was at a record 8.3%. Local funds are still 430 basis points under weight on the consumer stocks compared with their 14.1% weight in the BSE 200 index whereas they are 180 basis points overweight on pharma.
