Half the equity investment of mutual funds up to 20 shares only, one rupee out of every 4 equity schemes in the top-5 stocks. common investment strategies of fund managers
By Amit - June 23, 2022
Mumbai27 minutes ago
Fund managers advising investors to diversify their portfolios do not do so themselves. This reality is exposed by their investment pattern. Asset Management Companies (AMCs) of the country running mutual funds have kept half their equity investments in only 20 stocks.
According to AMC’s holding data for May, fund managers have invested one rupee out of every four equity schemes in the top-5 stocks. Shares of ICICI Bank alone account for more than 6% of the total equity fund. This data is important because the country’s AMCs charge management fees up to 2% of AUM (Asset Under Management) from investors. In such a situation, they are expected to adopt different strategies at their discretion to get maximum returns.
Reflection of weightage of stocks in index: Nilesh Shah
Nilesh Shah, Group President and MD, Kotak Mahindra AMC, said fund managers tend to invest in stocks that can outperform benchmark indices (such as the Sensex). If some stocks in the index have a higher weightage, a similar picture will emerge in the fund portfolio. But the big difference in the returns of funds shows that they have different stocks in their portfolio.