MF Update: Favourite sectors of MFs in June
Many retail investors try to gauge the mood of the market by checking where they are investing. Besides, the foreign institutional investors, other major smart investors that an individual follows is mutual funds. They believe that following these smart investors will help them to make a profitable investment. The jury is still out if they create better returns for the investors as there is more dissimilarity than similarity in this imitation. For example, the price and quantity may differ besides the fund managers may have bought the shares to complement their portfolio. For an investor, all the above points may not be in similar line and hence imitating a smart investor may or may not work.
Nevertheless, the broader outline may help investors to sense which sector is likely where the stronger hands are betting on. In the last seven months ending June 2019, mutual funds have increased their stake most in banks. It has increased from 21.85 per cent in December 2018 to 24.78 per cent at the end of June 2019.
Following table shows where the MFs have increased their stake most in terms of percentage in the last one month.
| Sector | Jun-19(%) | May-19(%) | M-o-M Change |
| BANKS | 24.78 | 24.46 | 0.32 |
| POWER | 3.45 | 3.28 | 0.17 |
| SOFTWARE | 8.65 | 8.49 | 0.16 |
| CONSUMER NON DURABLES | 7.3 | 7.14 | 0.16 |
| FINANCE | 9.68 | 9.55 | 0.13 |
Following table shows where the MFs have reduced their stake most in terms of percentage in the last one month.
| Sector | Jun-19(%) | May-19(%) | M-o-M |
| PETROLEUM PRODUCTS | 5.21 | 5.53 | -0.32 |
| GAS | 1.29 | 1.42 | -0.13 |
| CEMENT | 2.8 | 2.87 | -0.07 |
| PESTICIDES | 0.71 | 0.78 | -0.07 |
| OIL | 0.74 | 0.8 | -0.06 |