The Hindu Business Line : Biased towards large-cap stocks

Over the past one month, the stock markets have been touching new highs without taking much cognizance of the seeming uncertainties on the political front. The fed rate cut appeared to be the instigating force behind this rally that was replicated across the globe.

The market condition may, however, pose a stiff challenge for domestic equity fund managers, what with fresh inflows witnessed by a number of funds. Business Line scanned the September portfolio of equity funds to identify the stocks and sectors most commonly held by them.

Large caps preferred

The returns generated by large, mid and small cap BSE indices were on similar lines during this period. Out of the top 50 stocks held by funds, only seven stocks were from the mid-cap space. Reliance Industries continued to be the most-sought-after-stock across funds.

Despite a steep increase in the price of the share, the number of schemes that held 10 per cent of their assets in Reliance Industries increased from 25 in August to 30 in September.

Interestingly, over the past month, close to 20 of the 216 schemes pruned their exposure to Infosys Technologies. During this period, the stock price of Infosys gained close to 14 per cent.

With the power sector becoming the new fancied theme of many a fund manager, it did not come as a surprise that the recent public offer of Power Grid Corporation was bought by 178 schemes. While the top ten list of most preferred stocks held by funds largely remained unchanged, barring Larsen and Toubro, the rest underwent a minor rejig as a few funds exited some of these stocks.

Reliance Energy stock was added by eight more schemes when compared to the August portfolio of funds. Of the 198 schemes, 17 schemes now hold 5 per cent of their assets in the stock. The stock has appreciated by 77 per cent in the one-month period.

In the latest portfolio, exposure to select mid-cap stocks was enhanced.

With this, shares such as United Phosphorus, Punj Lloyd, Mphasis BFL and Century Textiles and Industries moved up the ladder of preferred stock held by funds. In the large cap space, Zee Entertainment was sold by nine schemes and stocks such as Bharti Airtel, ITC and HDFC were accumulated.

Satyam Computer Services was shown the exit by 17 funds. The stock was held by 147 schemes in the August portfolio.

‘SAIL’ing in

SAIL continued to be a favourite among funds as 23 more schemes added the stock to their portfolio.

As of September, 86 schemes increased their holding in SAIL by 60 per cent. Bank of Baroda, which graduated to the list of 50 preferred stocks (in the 50th place), was held by 59 schemes.

While a good number of stocks from the Reliance group were accumulated, Reliance Petroleum slipped out of the top slot even as the stock appreciated by 25 per cent over the past one month.

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