New Delhi [India]: The mutual fund (MF) industry’s investment in private banks reached a 20-month high of 18.9% in April 2025, according to a report by Motilal Oswal. This represents a month-on-month (MoM) increase of 50 basis points (bp) and a year-on-year (YoY) increase of 170 bp, making private banks the largest sectoral holding for mutual funds during the month.
“Private Banks’ weight rose to a 20-month high in Apr’25 to 18.9 per cent (+50bp MoM; +170bp YoY)”.
The report also noted that mutual funds increased their allocations in several sectors in April. Apart from private banks, sectors such as Oil & Gas, Automobiles, Consumer, Telecom, Retail, Insurance, Chemicals, and Real Estate also saw a MoM rise in weightage.
“In Apr’25, MFs showed interest in Private Banks, Oil & Gas, Automobiles, Consumer, Telecom, Retail, Insurance, Chemicals, and Real Estate, leading to a MoM rise in their weights”.
Conversely, sectors like Capital Goods, Technology, Non-Banking Financial Companies (NBFCs), Utilities, Metals, and Cement witnessed a decline in weightage.
The Oil & Gas sector continued its upward trend for the second month in a row, climbing to an eight-month high of 6.4% in April, an increase of 30 bp MoM, though still down 40 bp YoY. The Automobile sector stood at 8%.
Meanwhile, Technology, which remains the second-largest sectoral holding after private banks, saw a decline in allocation for the third consecutive month, falling to 8.3% in April, down 20 bp MoM, but still up 30 bp YoY. The Healthcare sector maintained a stable share at 7.6% in mutual fund portfolios.
In terms of sectors that saw the highest increase in value on a MoM basis, the top performers were Insurance, Textiles, Oil & Gas, Private Banks, and Chemicals.
On the other hand, Capital Goods saw its weightage fall to 6.9%, a decline of 30 bp MoM and 100 bp YoY.
The data signals a renewed preference among mutual fund managers for sectors like Private Banks and Oil & Gas, while traditional favourites like Technology and Capital Goods have seen relatively reduced interest.