Equity fund managers' fancy for IT stocks continues

Banks and FMCG witness more than 100 bps cut in allocation

India's equity fund managers' fancy for Information Technology (IT) shares is finding no end. On the other hand, banking stocks, once a favourite, continue to invite wrath from fund managers.

 

According to the latest data from the Securities and Exchange Board of India (Sebi), allocation to IT stocks have further surged to 14.01% in August, a rise of 110 basis points (bps) over the immediate previous month.

 

With this rise of exposure in IT, gap between fund managers' allocation to banks and IT has further shrunk. As on 31 August, 2013 out of total equity assets deployed in stock markets, 15.7% were in banking shares - a decline of 123 basis points compared with the July portfolio.

 

While fund mangers are re-routing investments in banks to IT counters, they chose to take a cautious stand on defensives - pharma and FMCG. Though in pharmaceuticals they raised exposure by around 38 bps, allocations to FMCG were severely cut during the month to 6.19% against 7.78% in July.