The Hindu Business Line : Funds reduce holdings in heavyweights in Dec

Fund houses have significantly diluted their holdings in index heavyweights in the month of December, with the mid- and small-cap stocks in the limelight on the bourses. Almost half of the top 50 stocks held across fund portfolios saw a pruning of positions by funds in this month. Index stocks, however, continue to dominate the list of holdings that are most commonly held. The number of funds holding Reliance Industries declined by 3 to 261 schemes. Many of the top 10 stocks, excepting ICICI Bank and Reliance Communication, underwent churning.

Top fifty

Stocks that entered into the top 50 last month have delivered significant returns. GAIL, which moved in November, had a good run. Axis Bank, which entered the top 50 has appreciated by 17 per cent.

In terms of sector preferences of funds, the banking space saw funds cutting exposure to State Bank of India, HDFC Bank, Punjab National Bank and Kotak Mahindra Bank, while they retained ICICI Bank and Bank of Baroda. Several of the funds continued to prune holdings in Infosys Technologies. But TCS and Satyam Computer Services were accumulated by few more funds and in total 126 and 108 schemes respectively, held these two stocks.

The surge in power equipment and power generation stocks appears to have prompted funds to take some profits in stocks such as Siemens, ABB and Crompton Greaves. Tata Power, NTPC and Suzlon Energy and Bharat Electronics slipped out of the top 50.

The lone exception to this trend was Reliance Energy; five schemes added this stock to their portfolio. In all, 125 schemes held up to five per cent of their assets in this stock. The number of funds holding Bharti Airtel has declined for the second consecutive month now and in total 192 schemes have this stock in their portfolio. Four more fund houses however, added Reliance Communication.

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