The mutual fund (MF) industry's exposure to private banks rose to a 20-month high in April 2025, reaching 18.9 per cent, according to a report by Motilal Oswal.
This marked a 50 basis points (bp) increase month-on-month (MoM) and a 170bp jump year-on-year (YoY), making private banks the top sector holding for mutual funds during the month.
It said "Private Banks' weight rose to a 20-month high in Apr'25 to 18.9 per cent (+50bp MoM; +170bp YoY)".The report highlighted that mutual funds increased their allocation across several sectors in April. Apart from private banks, the weights of Oil & Gas, Automobiles, Consumer, Telecom, Retail, Insurance, Chemicals, and Real Estate sector too rose on a MoM basis.
The report added "In Apr'25, MFs showed interest in Private Banks, Oil & Gas, Automobiles, Consumer, Telecom, Retail, Insurance, Chemicals, and Real Estate, leading to a MoM rise in their weights".
On the other hand, sectors such as Capital Goods, Technology, Non-Banking Financial Companies (NBFCs), Utilities, Metals, and Cement witnessed a decline in their respective weightage.
Oil & Gas saw a continued rise in weightage for the second straight month, climbing to an eight-month high of 6.4 per cent in April, up 30bp MoM, though still down 40bp YoY.
Automobiles stood at 8 per cent, while the weightage of Technology, which is the second-largest sectoral holding after Private Banks, moderated for the third consecutive month to 8.3 per cent in April, down 20bp MoM but up 30bp YoY. Healthcare has a 7.6 per cent share in mutual fund portfolios.
In terms of sectors that saw the highest rise in value on a MoM basis, Insurance, Textiles, Oil & Gas, Private Banks, and Chemicals led the chart.
Capital Goods' weightage declined to 6.9 per cent in April, a drop of 30bp MoM and 100bp YoY.
The data suggests a renewed interest of mutual fund industry in sectors like Private Banks and Oil & Gas, while traditional heavyweights like Technology and Capital Goods sector have seen a relative reduction in fund allocation.