Mutual Funds highest chunk of investment in commercial banks

By Amendra Pokhrel & Jashma Sainju

ShareSansar, April 16

Mutual funds have invested a total of Rs 3.094 arba in the shares of listed companies. It may not come as a surprise that the highest chunk of this investment has gone into buying the shares of commercial banks.

The stocks of commercial banks are clear favorite with the mutual funds with their combined investment in the banking stocks at 54.15%, which translates into a massive Rs 1.67 arba.

The microfinance sector has emerged a distant second to attract investments from mutual funds. Mutual funds have invested Rs 30.15 crore in the shares of microfinance companies, which is 9.75% of their combined investments in stocks.   

The rest of the pie is divided as follows: Hydro (Rs 25.68 crore or 8.30%), Non life insurance (Rs 23.84 or 7.71), Life insurance (22.65 crore or 7.32%), Development banks (20.21 crore or 6.53%), Telecom (11.95 crore or 3.86%), Manufacturing (Rs 3.01 crore or 0.97%), Finance (2.62 crore or 0.85%) and Hotels (Rs 1.72 crore or 0.56%).

While all mutual funds have made an outsize investment in the stocks of commercial banks, Siddhartha Investment Growth Scheme leads the race with investment worth Rs 47.83 crore, which accounts for 58.30% of its total fund of Rs 82.05 crore.

Without doubt, other mutual funds are just as aggressive in lapping up bank shares, but they appear less hungry when compared to SIGS. While Nabil Balance Fund-1 has invested Rs 36.31 crore in banking stocks, NMB Sulav and NIBL Sambriddhi’s investment in the stocks stand at Rs 30.24 crore and Rs 18.55 crore, respectively.  

Interestingly, Siddartha Capital’s another scheme Siddhartha Equity Oriented Scheme has bought banking stocks worth just Rs 34.61 crore.

Except for commercial banking, no other sector appeared to command equal attraction from all the mutual fund companies. Investments in other sectors varied from one mutual fund scheme to another.   

For example, after commercial banks, SIGS has favored Non life insurance sector (Rs 8.78 crore or 10.71%), followed by Hydropower (Rs 7.18 crore or 8.76%). Whereas, Nabil Balance Fund-1 has chosen Microfinance sector as its second most preferred investment option after commercial banks. From its total fund of Rs 78.68 crore, Nabil Balance Fund-1 has invested 14.70% or Rs 11.56 crore in microfinance, followed by 11.91% or Rs 9.36 crore in the Hydropower sector.  

NIBL Sambriddhi stands out as the only company with very strong preference for insurance stocks after that of commercial banks. Of its total fund of Rs 35.42 crore, the scheme has invested 14.90% or 5.27 crore in Life insurance sector and Rs 3.93 crore or 11.11% in Non life insurance sector.

Just like Nabil Balance Fund-1, NMB Sulav has a major investment in Microfinance sector after commercial banks. Out of its total Rs 52.50 crore fund, NMB Sulav has invested 11.69% or 6.13 crore in Microfinance sector, followed by 9.51% or Rs 4.99 crore in Life insurance.  

Meanwhile, Siddhartha Capital’s penchant for Hydropower stocks becomes apparent with the company investing 8.07% or Rs 4.90 crore from its second mutual fund scheme, Siddhartha Equity Oriented Scheme, worth Rs 60.76 crore.