The Hindu Business Line : Reliance, Bharti, Infosys widely held across equity portfolios

Unpredictable and volatile market conditions, new challenges to corporate earnings from global events and rising interest rates have combined to create difficult conditions for equity fund managers in recent months.

So which are the stocks and sectors that equity funds have most commonly held on to in their August portfolios? Business Line scanned the top 50 stocks held across equity funds to find out which were the most popular stocks and sectors with fund managers:

Index bellwether Reliance Industries turned out to be the stock most commonly held across fund portfolios in end-August. Half of the funds in operation allocated at least 5 per cent of their assets to this stock and 25 schemes actually held close to 10 per cent in this one stock. Reliance Industries has been a top performing index stock over the past year with returns of about 80 per cent. Most fund managers benchmarking themselves to the Sensex or the Nifty may have added the stock to the portfolio in the interests of outperforming the stated benchmark.

On the other hand, frontline software stock Infosys was held by has many as 216 funds, but has underperformed the markets over the past year. Bharti Airtel, Larsen & Toubo and ICICI Bank closely followed Reliance and Infosys as the most popular stocks across funds. While these choices appear fairly obvious ones from the large-cap basket, those such as ITC, Maruti Udyog and Tata Steel show that managers have been willing to bet on stocks from out-of-favour sectors during this period. As many as 149 funds had 5 per cent exposures to Maruti and 143 funds had 5 per cent exposures to ITC in August.

Most of the top 50 stocks were large-cap stocks, with very few mid-caps making an appearance in this list. This is despite the fact that over the past six months, the BSE Midcap index outpaced the bellwether BSE Sensex. Pantaloon Retail, Thermax and United Phosphorus provided the few exceptions; these were the mid-cap stocks that were widely held across fund portfolios.