Top 10 fund managers prefer IT, diversified, banking stocks

Mumbai, July 26 | Updated: Jul 27 2006, 05:30am hrs
Information technology, diversified companies and banks emerged as most preferred sectors for mutual funds. Top 10 mutual fund houses managing 73% of the total industry wide assets of Rs 2,65,535 crore have invested 18.1% of their assets in the IT sector on an average, followed by diversified companies at 13.41% and banks at 11.17% at the end of June 30.

Franklin Templeton MF invested the highest in the IT sector at 22.88% of its portfolio followed by DSP Merrill Lynch MF (22.61%). Among the schemes of FT MF, Franklin Infotech Fund-G invested 99.26% of its fund in IT stocks and the balance i.e., 0.74% in money market.

Rajat Jain, CIO, Principal PNB AMC said, "IT is one of the larger exposures in most of the MF houses portfolio. The underlying strength in their businesses, strong volume growth and the flat pricing are the main reasons. We expect the pricing environment to improve over the next few quarters, though gradually." The weakening of the rupee helps their bottomline also, he added.

DSP Merrill Lynch MF invested the highest in diversified stocks at 18.49% of its portfolio followed by Tata Mutual Fund at 14.98%. Among the schemes of DSP Merrill Lynch MF, DSP Merril Lynch Equity Fund invested 18.27% of its funds on diversified stocks. It has invested Rs 28.04 crore in Reliance Industries as on June 30, 2006.

In the banking sector, the highest investment was made by Reliance MF ( 18.08%) followed by Prudential ICICI (13.23 %) and UTI MF (11.64%). Among others more than 10% investment was seen in the case of pharmaceuticals (10.92%) as on June 30, 2006.

In the case of pharmaceuticals, Reliance MF invested the highest at 21.95 % of its portfolio followed by FT MF (15.38%). Between 5% to 10% investment by MF houses was seen in the case of 19 industries. Significant among them are auto & ancillaries (9.52%), finance (9.11%), housing & construction (7.05%) and tea (5.6%).

Less than 5% average investment by top 10 MF houses was seen in the case of 16 industries. These are rubber & tyres (2.1%), paper (3.73%), sugar (4.27 %), shipping (4.52%), steel (4.55 %) and consumer durables (4.9%).

Among the top 10 MF houses, UTI MF invested in 34 industries (highest among the MF houses) followed by SBI MF (33).

UTI MF has invested most in IT (17.73%), diversified (13.97%) and banks (11.64%). SBI MF has invested most in IT (20.64%), pharmaceuticals (12.73%), auto & ancilliaries (9.76%) and cement (7.81 %).