Data Track

Here's equity mutual funds' top sectoral picks in past decade

Dhuraivel Gunasekaran | Updated on June 20, 2019 Published on June 20, 2019

This race chart portrays the top 10 sectors preferred by the equity mutual funds. Banks, finance, software, consumer non-durables, petroleum products, pharma, construction projects, auto, power, cement, oil and telecom were the top sector choices over the last ten years.

The performance of the sectors is typically related to the economy, global conditions and business cycles. Mutual funds bet on sectors mostly based on the objective of the funds they manage. However few sectors including banks, financial, software and consumer non durables have been preferred bets in most time frames. 

Banks have been the top of the chart across time frames. As of April 2019, almost one fourth of the equity AUM of the mutual funds has been invested in the banking stocks. The BSE Bankex, an index tracking the performance of important banking sector stocks, has grown at a compounded annual growth rate (CAGR) of approximately 19 per cent over the last 15 years. Some of the preferred companies are HDFC Bank, ICICI Bank, SBI and Axis bank.

Financial services sector including stocks of Non Banking Financial Companies (NBFCs), insurance companies, asset management companies, stock exchanges and broking services, was another popular choice. Popular stocks in the financial sectors are HDFC Ltd, Bajaj Finance, Bajaj Finserv, HDFC life insurance, Indiabulls housing finance and multi commodity exchange of India.

Mutual funds have also been betting on stocks of software companies including Infosys, TCS and HCL technologies. Sun pharma, Cipla, Lupin, Dr Reddy’s and Aurobindo pharma were few preferred stocks from the pharma sector.

Published on June 20, 2019
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