The Hindu Business Line : Reliance Cap, Cummins step into the top fifty stocks

With the market going through volatile movements, decisions on the stocks and sectors to be held in a portfolio were difficult, even for seasoned investors, over the past month. How did the managers of equity funds rise to the challenge and what are the stocks they most commonly held in their portfolios?

Business Line scanned mutual fund portfolios to shortlist the top 50 stocks held across funds by end of October 2007, to find the most favoured stocks and the assets allocated to them. Data for the month showed that the majority of funds continued to keep faith in Reliance Industries, with seven more schemes adding a substantial position in the stock to their portfolio. This is despite the stock’s vertical price move.

The outperformance of large-cap stocks continued in October, with the Sensex returning 14.5 per cent. It outpaced the mid- and small-cap indices by 6.5 per cent and 8 per cent respectively.

Large-caps hog limelight

While Reliance Inds was undisputedly the most commonly held stock across funds, Bharti Airtel continued to be second most popular, despite the stock’s intermittent blips due to policy uncertainties.

Five schemes reduced their holdings in stock during the month. Power Grid Corporation, which many funds added to their portfolio after its IPO, underwent some profit-booking on the back of the steep run-up from its listing price; 10 schemes exited from this stock in the month. ABB saw accumulation, with a few more schemes stepping up their allocation to this stock to five per cent of their total assets. State Bank of Ind moved on to touch lifetime highs, 9 new schemes allotted 5 per cent of their assets to the bank, taking the total number to 43.

Infosys Technologies continued to be held by several schemes as part of their portfolio despite its underperformance. However, a few funds did seem to lose patience, with 25 schemes reducing exposures to the stock over the past two months. Satyam Computer, Mphasis and HCL Technologies all saw some pruning across portfolios. If Reliance was the start performer last month, L&T, which surprised markets with exceptional numbers, was much sought after this month. It appears that fund houses anticipated the numbers, with more funds adding the stock in end October. They were proved right, with the stock surging sharply over the past couple of weeks. SAIL continued to remain in the good books of funds and close to 33 schemes added the stock to their portfolio in the past two months.

On the other hand, funds seem to turn cautious on Reliance Petroleum, leading to the stock slipping out of the preferred 50. Hindalco and Ambuja Cements moved out of the top 50. Instead, funds accumulated Reliance Capital and Cummins, which made an entry into the top fifty in October.

More Stories on : Mutual Funds | Insight | Stocks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
India Inc holds on to margins

Reliance Cap, Cummins step into the top fifty stocks

Index Outlook