The over-Rs 20,000 crore in cash held by equity mutual funds shows that they are choosing to be on the sidelines in the current market uncertainties.
Data on portfolio churn by funds in January also supports this view, with funds preferring to make only small changes in their sector preferences.
Data from NAV India – a service provider – based on the January-end portfolio shows that out of 12 leading fund houses, six preferred to make no sector additions to their portfolio. The other six added a few sectors to their portfolio.
There were no common sector preferences.
HDFC Mutual Fund added stocks from industrial products, while Fidelity Mutual Fund added metals and pesticides. Brewery was the only new sector that found its way into HSBC Mutual Fund’s portfolio. Stocks from the oil and gas sector were added by Tata Mutual Fund. But one sector viewed cautiously by fund houses and moved out of the portfolio was petroleum. Others that saw pared exposures were automobiles, construction, metals, cement and textile products.
Fidelity added pesticides, but moved out of fertiliser and agriculture stocks. Sundaram BNP Paribas Mutual Fund maintained status quo in the portfolio.
Despite market fluctuations, fund houses seemed to prefer a buy-and-hold strategy. Fund houses may be active in taking trading calls intra-month, which may not reflect in their month-end portfolio disclosures.
