Equity Mutual Funds Realign Asset Allocation Towards IT and Healthcare Sector in August 2024
Shifts in Sector-Wise Allocation in August
The Indian mutual fund industry continued its positive trend in active equity mutual funds during August. As market valuations reached historically high levels, fund managers adjusted their asset allocation strategy. The focus shifted towards stocks within the information technology and healthcare sectors, with the latter witnessing a rise in their share of total holdings.
Cash Holdings on the Rise
- Cash and cash equivalents made up 4.94% of total active equity holdings, representing a growth of 0.46% from July.
- Despite this, key sectors like technology and healthcare saw allocation increases of 0.37% and 0.28%, respectively.
However, sectors such as banks underwent the most significant downgrades in August, with a decline of 0.45%, while maintaining a strong 14.27% share. Meanwhile, the automobile sector saw a reduction of 0.31% in its mutual fund allocation.
Sector Analysis and Future Implications
With the shift in asset allocation, fund managers are clearly positioning for potential gains in the IT and healthcare sectors. These strategic adjustments reflect confidence in these industries' resilience, offering valuable insights for investors monitoring the mutual fund landscape.
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