Funds' India tilt eases a tad in March

Foreign fund managers have reduced their preference for domestic equities in March, albeit marginally.

A monthly regional survey of fund managers, commissioned by Merrill Lynch, reports that only 12 per cent of the respondents were overweight on India in March, compared with 13 per cent in February.

Only 12 per cent of the respondents have held that they would go overweight on India "thinking about country rotation over the next 12 months".

At the same time, these fund managers cut their preference for South Korea and Malaysia. Out of the 12 Asia-Pacific countries (excluding Japan), fund managers have reduced their overweight stance in the case of Hong Kong by six percentage points to three per cent and for Taiwan by one percentage points to 18 per cent.

More fund managers (24 per cent of those polled in March) said they would remain underweight on Australia, as against 22 per cent in February, and 21 per cent said the same of New Zealand, up from 13 per cent in the previous month.

They cut their underweight preference in the case of Thailand to zero per cent from last month's three per cent and Singapore to three per cent from six per cent and China to six per cent from 13 per cent. Indonesia was the worst hit in preference as fund managers preferred to go underweight by three per cent as against an overweight preference of six per cent last month.

Sectorwise, 53 per cent of the fund managers polled said they were increasing their overweight stance on the energy sector, 47 per cent said they were going overweight on the technology sector.

The increases were, however, moderate in basic materials where 30 per cent said they were going overweight, up from 29 per cent in February, general industrials got 35 per cent of the respondents' poll, up from 12 per cent and automobiles got a higher 24 per cent in March, up from 18 per cent in February. They also increased their overweight stance to six per cent in case of consumer staples from an underweight stance of six per cent last month.

Fund managers preferred to go underweight on the banking sector by six per cent as against an overweight position of 18 per cent in February.

The media sector also faced the heat as six per cent of the fund mangers polled said they were going underweight as compared to zero per cent, retail to six per cent from last month's over weight position of 24 per cent, telecommunications to 35 per cent from 18 per cent and insurance to six per cent from zero per cent last month.

They maintained their underweight stance at 35 per cent in case of pharmaceuticals and healthcare sector and that of 53 per cent in case of the utilities sector.