New Delhi: Mutual funds' allocation to the banking sector dropped to Rs 78,582 crore in June, after hitting an all-time high in the preceding month, amid weakness in bank stocks.
In comparison, equity fund managers' deployment in banking stocks stood at Rs 54,746 crore in June 2014.
According to industry experts, fund managers cut their allocation last month to bank stocks on account of profit booking.
They also said that fund managers cannot take a bearish call on banking stocks, given the high weightage attached to the index.
As per the data available from Securities and Exchange Board of India (Sebi), overall deployment of equity funds in bank stocks stood at Rs 78,582 crore in June as compared with Rs 79,215 crore in the previous month.
Besides, exposure to banking stocks was at 20.54 percent of equity AUM in June as against 20.94 percent in the preceding month.
The BSE bankex index fell 2.5 percent in June, while the benchmark Sensex witnessed a decline of 0.17 percent.
IT was the second-most preferred sector with fund mangers after banks with an exposure of Rs 35,409 crore, followed by pharma (Rs 29,744 crore), auto (Rs 27,163 crore) and finance (Rs 24,041 crore).
MFs are investment vehicles made up of a pool of funds collected from a large number of investors and invest in stocks, bonds and money market instruments, among others.
