Equity funds hike exposure to banking, NBFC and auto stocks in Jan: Data

Indian equity fund managers have increased their allocation towards private banks, non-banking financial companies (NBFCs) and auto in January. The data from Indian Mutual Fund Tracker by Motilal Oswal shows that in January six of the top 10 stocks that saw the maximum increase in value were ICICI Bank, Axis Bank and SBI.

Market participants say that in November and December of last year, the banking index had seen a sharp fall and there was an opportunity to enter in those stocks at lower levels. S&P BSE Bankex Index was up by nearly 8 per cent in January, while in November and December it was down by 8.67 per cent and 0.91 per cent respectively.  

“After reaching a 15-month low in Dec’21, private banks’ weight climbed up to 17.5 per cent (+100bp MoM;-90bp YoY) in Jan’22. On the other hand, public sector undertaking (PSU) Banks’ weight was at a 23-month high of 3.6 per cent (+50bp MoM and +100bp YoY). While technology’s weight moderated to 12.3 per cent (-120bp MoM; +90bp YoY) after two consecutive month of increase, healthcare’s weightage moderated in Jan’22 to 6.7 per cent (-50bp MoM; - 110bp YoY),” said the report from Motilal Oswal.

Among the top ten stocks which saw maximum increase in value were in banking, financial services and insurance (BFSI) space. While stocks that saw the maximum decrease in value month-on-month were Infosys, HCL Technologies, Avenue Supermarts, Zomato, among others.

Top sector allocation by mutual funds (In %)

Category	Dec-21	Jan-22
Banks-Private	16.5	17.5
Technology	13.5	12.3
NBFC	7.3	7.4
Healthcare	7.2	6.7
Auto	6.4	6.6

Source: Motilal Oswal