Even as Sensex and Nifty continue their strong rally driven by a cheer in blue chip stocks, just 10 top names make up a whopping 34% of the entire mutual fund portfolio. Interestingly, mutual funds in India have loaded up on the shares of HDFC Bank, with mutual funds investing about 6.6% of their overall portfolio into the stock. Apart from HDFC Bank; Infosys, ICICI Bank, SBI and L&T have also made it to the top 5 portfolio holdings. Mutual funds have invested 4.2%, 3.9%, 3.4%, 3.4% and 3.1% into the shares of Infosys, ICICI Bank, SBI and L&T respectively.
Top performing mutual funds including Axis Bluechip Fund, Edelweiss Large-cap Fund and Canara Robeco Bluechip Equity Fund have taken a penchant for the stocks of RIL, TCS, Infosys, Kotak Mahindra Bank with these funds investing up to 6.6% of their entire portfolio in the shares.
Overall, mutual funds have invested about 3.1% of their entire assets into the shares of ITC, followed by HDFC (2.8%) and RIL (2.5%). Interestingly, top 40 stocks account for 63% of MFs’ equity portfolios in India, Kotak Institutional Equities said in a report. Notably, just the top 10 stocks ie, HDFC Bank, Infosys, ICICI Bank, SBI, L&T, ITC, HDFC, RIL, Kotak Mahindra Bank and Maruti Suzuki make up 34% of the total mutual fund equity portfolios in India.
According to Kaustubh Belapurkar of Morningstar, fund managers are trimming position in stocks, given expensive valuations. “Not to a very large extent, but given that some of these valuations, the stock prices have run up so heavily that the managers do not mind trimming some positions and ICICI presents an interesting sort of value opportunity from that sense. You would want to reallocate some capital back in that. It is not like every manager is doing it but ICICI has seen a reasonable amount of buying in July,” Kaustubh Belapurkar, Director, Fund Research, Morningstar Investment told in an interview with ET Now.