MF update: Share of healthcare sector at 40-month high

Historically, it has been witnessed that after every few years, the leader in the equity market changes, which then leads the further gain in the equity market. The last rally was led by Banks and NBFCs. The current turmoil in the equity market may also produce its own leader. Going by the initial movement, the healthcare sector seems to be one of the top contenders to gain a leadership position.

For the month of April 2020, the weightage of healthcare, oil, autos, chemicals, metals and telecom have increased among mutual fund schemes. The weightage of the healthcare sector has reached a 40-month high of eight per cent, which is 90 basis points higher than the previous month and 220 basis points higher on a yearly basis. Just a couple of months back (February 2020), the healthcare sector had a weightage of mere 5.9 per cent in the total equity MF portfolio.

Surprisingly, none of the pharmaceutical companies is a part of the top five companies, whose funds have increased their exposure. The top five companies where MFs have increased their exposure are Reliance Industries, HDFC Bank, ICICI Bank, Bharti Airtel and Infosys.

Sectors, where the MFs have reduced their weightage in the last month are consumer, PSU banks, capital goods, technology, retail, private banks, utilities, NBFCs and media. Meanwhile, the companies that saw a moderation in their weightage are HUL, Tech Mahindra, Aditya Birla Fashion, RBL Bank and SBI.