INSUBCONTINENT EXCLUSIVE:
But a few of them still managed to beat their benchmarks for year and credit for it goes to banking and IT stocks
Turns out, equity funds that had incrementally raised investments in banking and IT sectors and lowered exposure to slowing auto sector
through year beat other schemes by a mile
Nifty Auto index tumbled 25 per cent during 2018 against a 6.7 per cent rise in Nifty Bank and 23 per cent rally in Nifty IT indices.
IT
and pharma are being seen as good hedge against poll-related uncertainty in 2019 too
Some analysts say even auto stocks may throw up many value buying opportunities after recent correction.
Axis Multicap Fund delivered
category best return of 9.2 per cent (direct plan) in last one year compared with a 2 per cent fall in benchmark Nifty500 Total Return Index
and a 3 per cent rise in Nifty50
namely HDFC Bank, Bajaj Finance, Kotak Mahindra Bank, ICICI Bank and HDFC
The fund steadily raised exposure to banking stocks, which accounted for 39.97 per cent of its total equity asset as of November 30, 2018
FMCG stocks, too, found favour
But allocation to auto sector (as percentage of total assets) almost halved during period.
UTI Equity Fund came second, delivering 4.8 per
This fund also had higher allocations to IT and pharma sectors, and had cut exposure to auto stocks.
Canara Robeco Equity Diversified Fund
offered 2.2 per cent return for last one year, which is still good as similar schemes saw up to 20 per cent drop during period
This fund allocated more towards IT and banking stocks, cut exposure to energy and held on to FMCG and construction sectors
It had LT, RIL and ITC among its top 10 holdings
In view of elections ahead, there could be an increased allocation to sectors that probably do not have much of a bearing on local economy
From a valuation perspective, auto or even corporate-oriented banks could be considered
While valuations have increased moderately, such banks are still cheap on a 10-15-year basis
Portfolio Manager PMS at Prabhudas Lilladher, says technology stocks have massively outperformed market in last one year and most
institutions now have reasonably large allocations to this space
He finds IT stocks fairly valued and does not see much scope for further re-rating
said.
He said eventually value buying will emerge in auto, where stocks have seen a sharp drawdown because of slowing demand,
