MFs accumulate capital goods, rate-cut beneficiaries in May

By

, ET BureauLast Updated: Jun 16, 2025, 05:40:00 AM IST

Synopsis

In May, despite reduced equity mutual fund inflows due to profit booking, fund managers adjusted portfolios, favoring large-cap companies. They capitalized on corrections in the capital goods sector, acquiring stocks like GE Vernova and BHEL, anticipating power sector growth.

In May, as the Nifty 50 rose for the third consecutive month and profit booking by investors led to lower inflows into equity mutual fund schemes, fund managers churned portfolios with a bias towards largecap companies.

With the long-term outlook for the power sector remaining robust, they used the opportunity to buy into the capital goods segment, which had seen a steep correction over the past six months, adding stocks like GE Vernova, BHEL, and Kirloskar Oil Engines.

Agencies

Expectations of rate cut transmission leading to higher demand for consumer and housing loans—benefiting the margins of NBFCs (Non-Banking Finance Companies) —prompted selective buying in NBFCs and HFCs (Housing Finance Companies) such as Bajaj Finserv, PNB Housing Finance, and Can Fin Homes.

Large fund houses also accumulated Eternal and Swiggy after 20–25% correction in stock prices, driven by strong growth in the quick commerce segment.