Mutual funds' Nifty 50 allocation falls to 21-year low
Exposure slips below 50% for first time in over two decades as funds broaden portfolios beyond benchmark stocks
Domestic mutual funds in India allocated 49.4% of their holdings to Nifty 50 stocks in the September quarter, marking the lowest such allocation in 21 years. This decrease of two percentage points from June's 51.4% represents the sharpest drop since 2005. The decline reflected a broader trend among institutional investors, who collectively reduced their Nifty 50 allocations to a record low of 54.6%.
Semiconductor stocks, currently in oversold territory, were identified by Goldman Sachs as a potential buying opportunity. Despite this shift, mutual funds maintained a high concentration in large companies, with exposure to the top 10% of listed companies by market capitalization rising by 4.2 percentage points to 87.6%. This increase was mainly due to higher investments in mid-cap stocks, rather than a move away from large companies.
The Nifty 50 index ended the quarter with a 2% gain, while emerging market benchmarks were down, prompting investors to seek bargains abroad. Foreign Portfolio Investors (FPIs) trimmed their Nifty 50 holdings by 1.3 percentage points to a record low of 56.2%.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Promoter holding in Nifty 50 firms falls to 40% thehindubusinessline.com
