Series 125 – Sector Moves in Mutual Funds

The sector-wise MF industry weight data is shown below and we would like to highlight the key insights:

1. Financials Still Dominate, But Momentum Is Slowing– Financials remain the largest sector by value (~29.2%), but have seen a steady decline over the past 3 months (-50 bps).

ITUS Reflection: Our exposure is into largest private players in banks with bottom up outlook on lending growth. Focus on Insurance, AMC’s and Fintech- with diversified view of India’s Financial deepening.

2. Discretionary Consumption Is Gaining Steam – Discretionary sector has surged (+120 bps in 3 months), indicating rising investor confidence in consumer demand.

ITUS Reflection: Discretionary reflecting premium and lifestyle demands and also with experiential and leisure consumption play.

3. Industrials and Building Materials Are Losing Steam – Industrials and Building Materials have seen mild declines (-23 bps and -1 bps respectively), suggesting a pause in infra optimism.

ITUS Reflection: Our positioning into Capital Goods, Logistics, Cement and Speciality chemicals are with the focus on execution visibility , policy tailwinds and margin resilience in the names. While we see short term sentiment drag our focus is on long term execution .

4. IT Sector Is Softening Despite Past Strength – IT weight has dropped from 9.7% to 8.0% over the last few months (-29 bps), likely due to global slowdown fears and margin pressures.

ITUS Reflection- ITUS has exposure to niche BFSI tech or ER&D plays, reflecting confidence in valuation support and AI-led growth.

5. Healthcare and Staples Are Stable Anchors – Healthcare has seen a mild uptick (+29 bps), while Staples remain flat—suggesting defensive positioning amid volatility.

ITUS Reflection: A steady allocation to pharma or FMCG would indicate risk-balanced approach. Healthcare picks are across generics, speciality and diagnostics. FMCG allocation is brand-led with strong volume and distribution.

 

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