Indian mutual funds reduced their equity exposure to the cement, fast-moving consumer goods (FMCG), petrochemicals and pharmaceutical industries in July.
An analysis of the equity portfolios of 75 funds for July reveals most mutual funds have either exited or reduced their exposure to these sectors.
On the other hand, domestic fund managers are overweight on the automobile, banking and finance, metals, refineries and information technology (IT) industries. These fund managers expect a stronger earnings outlook in the automobile and pharmaceuticals industries and a lower growth forecast in the FMCG and IT sectors.
The 75 funds are classified as diversified equity funds, balanced and sector funds. US-64 has not been considered for study because of the non-availability of information regarding the equity portfolio of the fund.
All the mutual funds studied here underweighted the cement sector, so much so that the number of funds with no exposure to the cement industry increased from 18 in July 2001 to 37 in July 2002. On top of that, 32 funds reduced their exposure to the cement sector.
In the aggregate, the share of the cement sector declined from 2.56 per cent of the corpus in July 2001 to 1.39 per cent in July 2002. The cement stocks on the block were Larsen & Toubro (L&T), Gujarat Ambuja Cement and ACC. Mutual funds
