The mutual fund (MF) industry prefers to play safe in a volatile market. A large number of MF equity schemes have an exposure of more than 10% of their corpus in several front running stocks as they provide better returns even in a volatile market.
According to the MF industry reports, Reliance Industries Ltd (RIL) is the most favoured stock for the fund houses till date. Around 243 schemes have an exposure in the RIL stock. Out of this, more than 33 schemes have parked more than 10% of their corpus in the RIL stock. And, 130 schemes have an exposure of more than 5% of their corpus in the same stock.
The ongoing sub-prime mortgage crisis has not deterred the MFs from investing in the ICICI Bank stock which is also one of the leading constituents of the benchmark measures?Sensex and S&P CNX Nifty. The ICICI Bank stocks ranks as the second most preferred holdings in the list of the MFs? equity schemes. More than 230 schemes have invested in this stock. Out of this, 58 schemes have an exposure of more than 5% and 85 schemes have more than 10% exposure of their corpus in the ICICI Bank.
Commenting on the MFs? tilt as an investor towards the front running stocks, a senior fund manager from a domestic fund house said that the fund managers do not want to take any risk in a volatile market as the global factors are impacting the market movement. They do not want to invest in a stock which is under-researched or is not known in the market and where returns are unpredictable.
Around 200 MF schemes have an exposure in the stock of Larsen & Toubro (L&T). Out of these 200 schemes, 54 schemes have more than 5% and 4 schemes have more than 10% exposure of their corpus in the L&T stock.
The stock of SBI, a PSU bank is the fourth favoured stock. Nearly 180 schemes have an exposure in this stock. Out of 180 schemes, 24 schemes have more than 5% and 6 schemes have more than 10% exposure in the counter.
Among other important stocks, where a large number of MF schemes have more than 5% exposure includes Bharat Heavy Electricals Ltd, Bharti Airtel Ltd and ONGC.
