Mutual fund holdings in private banks hit a record
The weight of private banks in the portfolios of domestic mutual funds has gone up to a record high of 20.8 per cent in September, 2019, according to Motilal Oswal Securities. HDFC Bank & ICICI Bank dominate the pack for 14 of the 20 top MFs.
The holding in HDFC Bank and ICICI Bank constitutes 5-11% of the total equity assets of major mutual funds. Amid rising demand from investors, HDFC Bank has emerged as the largest market-cap gainer among global banks with an increase of $25 bn in a year, according to Bloomberg.
Private banks have a weight of 26.8% and 21.6% in the Nifty 50 and the BSE 200, respectively.
The domestic mutual fund holding in consumer stocks rose to 8.4% in September 2019 — a multi-quarter high. Nestle’s inclusion in the Nifty too contributed to the higher allocation. However, despite ramp-up in allocation, local funds are underweight 300 bps in consumer stocks compared with the consumer stock weight in the Nifty.