Looking at the absolute return strategy of Nippon reveals that the current asset allocation being favored by fund houses translates to nearly 60% Equity – 20% Gold -20% Debt.
In the Debt space fund house is overweight on Gilt over Short Term Debt with nearly 80% of its Debt holdings in Gilt.
Owing to sharp corrections in small cap space shares, the fund house has added in individual names and pockets but in the overall scheme of things it is still having least exposure in small cap and is overweight on large caps within the equity space. Another noteworthy point to see is that alpha neutral addition has been made in equity.
In the last three months- the equity allocation has gone up in absolute return strategy owing to correction in markets.
Now, let’s look at how Kotak AMC is navigating the landscape in the absolute return strategy.
The asset allocation in their absolute return strategy fund reveals, 65% Equity – Gold nearly 10%, Debt 20% and Foreign Equities 5%.
The Gold exposure has been cut down on back of rise in Gold prices and so has been the cut in Debt exposure. Equities have been pushed higher in Asset allocation.
Alpha neutral additions in equities have been made through Nifty Index- denoting narrow range of market breadth.
Another new sector which has found favor is Transportation and logistics.
In the Debt side, fund houses are aggressively positioned on the higher side of duration play with no exposure towards the short term.
Moving on to determine sectoral preference and pockets which look attractive through the lens of ICICI Pru AMC;
Maximum overweight position of the fund house is in the Banking and Financial services fund. The fund house looks to reduce the volatility by balancing it out with pockets like Pharma, FMCG, Bharat Consumption, Equity Minimum Variance and prefer holding nearly 10% cash.
The above observations have been in portfolios disclosed as per March 31 2025.