December 11, 2009

The mutual fund (MF) industry is highly exposed to the banking sector, according to the Securities and Exchange Board of India (Sebi) data.Banking stocks accounted for 14.17 per cent of the total equity assets under management (AUM) of the industry at the end of October. Also, bank certificates of deposit (CDs) accounted for 35.23 per cent of the total debt AUM of the industry.

MFs hold close to Rs 25, 245.38 crore assets in banking stocks. The other sector to which MFs have huge exposure is industrial capital goods, which accounts for Rs 13, 731.95 crore, or 7.71 per cent, of the industry’s AUM. Software, power, pharma and petroleum stocks have also generated a huge interest from fund houses.The reason behind higher allocation to the banking sector is the higher weight it enjoys in various indices.