What are the leading equity funds in the country buying today? What are their favourite sectors? We have collated data from factsheets of four leading equity funds to answer these questions.

Going by latest fund factsheets (as on June 30, 2002), what comes out quite strikingly is the concentrated portfolio strategy pursued by leading diversified equity funds, i.e. a handful of sectors accounting for about 50% of the fund's assets. To get latest sectoral updates in fund portfolios, click here

Whats funds are buying

Diversified equity funds	Pharma	Software	FMCG	Auto	Total
Alliance Equity	8%	23%	7%	16%	54%
Birla Advantage	22%	19%	4%	7%	52%
Templeton Growth	7%	9%	15%	9%	41%
Zurich Equity	18%	10%	8%	13%	49%

(Data as on June 30, 2002. Sectoral allocations represent % of net assets)

Not only is the strategy very similar with these funds, even the sectors they are chasing are similar as is evident from the table above. The funds in our sample seemed to have identified pharma as the next growth frontier for the country and have been accumulating stocks for quite some time now. Most funds still haven't got over the tech fever and the notion that tech still has steam left is prevalent among fund managers. FMCGs (fast moving consumer goods) occupy a relatively lower position in fund portfolios for their defensive appeal. Autos also for their defensive nature and the fact that car sales have been looking up for some time now have made their presence in fund portfolios.

Investors need to keep a close watch on these allocations. One is to know what your fund manager makes out of the volatility in the markets, more so with the US markets pulling down domestic stocks. The second reason is to ensure that your fund remains well-diversified and does not build alarmingly high investments in a handful of sectors. In this age of volatility and risk, you, the investor, need to do your bit to monitor your investments.

 

PersonalFN provides research recommendations to its premium research subscribers and financial planning clients. To know the recommendation on this investment, become a subscriber or client today. Click here to know about our research services. or Click here to know about our financial planning services. Or, simply write to info@personalfn.com. You can also call us at +91 22 6136 1200.

Add Comments