MFs cut exposure to large banks; load up on small lenders, auto cos

As markets inched closer to all-time highs, money managers at top mutual funds cut exposure to large banks, while purchasing smaller lenders and select financial services firms in the HDFC Group in May.

Among small banks, they bought Equitas, AU Small Finance, Karur Vysya, and Indian Bank. Fund managers also bought select automobile shares as these companies may show increased earnings growth in the coming year on the back of improved demand. Analysts said auto companies are investing to maintain their market share in their business segments, which are likely to reflect across the value chain, prompting fund managers to buy stocks like Tube Investments of India, Exide Industries, and CIE Automotive.