Cash reduction came alongside a 3.1 percent rise in the Nifty, which ended June at 25,517, and a 4.3 percent month-on-month increase in mutual fund equity AUMs to Rs 36.6 lakh crore.
Mutual fund sectoral allocations from May to June 2025 shows rising preference for NBFCs, Retail, and Consumer Durables, according to Motilal Oswal Financial Services’ Fund Folio.
Indian mutual funds continued to rebalance their portfolios in June 2025, marking a notable shift from allocations seen in May. The latest Fund Folio data shows that fund managers raised their exposure to NBFCs, Retail, Consumer Durables, Healthcare, and Telecom, while trimming weights in Private Banks, Automobiles, Technology, Oil & Gas, and Consumer.
Equity assets under management (AUM) rose 4.3 percent month-on-month to Rs 36.6 trillion in June, driven by a 3.1 percent rally in the Nifty and a pick-up in net equity inflows, which rose to Rs 246 billion from Rs 201 billion in May. The month also saw a new high in SIP inflows, underscoring sustained retail participation, the report noted.
Private Banks, which is the largest mutual fund sector holding, saw its weight drop for the second consecutive month, from 18.4 percent in May to 17.9 percent in June, after peaking at 18.9 percent in April. While still dominant in absolute terms, mutual fund exposure to the sector now lags its 20.8 percent weight in the BSE 200 index, making it one of the most significantly underweight sectors, the report noted adding that technology too remained under pressure, with its allocation falling to a one-year low of 8.1 percent in June from 8.3 percent the previous month, well below its BSE 200 representation of 9.3 percent.