With gold prices rising, shares of gold loan companies have been witnessing a rally. Earlier this month, the scrips of Muthoot Finance Ltd and Manappuram Finance Ltd, the only two listed companies whose core business is gold-based lending, outperformed the BSE 500 index with a rally of around 100% and 200%, respectively.
But data shows that mutual fund houses are not that keen on riding this wave, as they have very little exposure to such companies.
While 51 funds have invested in Muthoot Finance, the average exposure of such companies stands at just 2.05%, according to data from Value Research (see table). This figure goes up to 5.04% when you take into account the top six schemes. The exposure of other schemes, on an average, is only 1.65% of their total portfolio.
