Mutual funds reduce exposure to Hindustan Unilever shares,but heavyweights keep the faith

Mutual funds reduce exposure to Hindustan Unilever shares,but heavyweights keep the faith

Unilever’s open offer announcement to raise stake in Hindustan Unilever stumps market.

Mutual fund houses have steadily reduced their investments in Hindustan Unilever (HUL) shares over the past few quarters even as the FMCG major attracted sizeable investments from top fund houses in the past few years.

The share of overall mutual fund holding in HUL has consistently been declining since the quarter ended September 2011,when the MF share in HUL was as high as 3.1%. The share of holding stood at 1.56% for the quarter ended March 2013,down from a three-year high of 3.24% at the end of the March 2010 quarter,data available on the BSE website show.

Overall investments have declined by about R362 crore to R1,309 crore for the three months to March 2013 from R1,671 crore in the year-ago quarter,data collated from Value Research,a mutual fund tracker,show.

DSP BlackRock MF has reduced its investment from R219 crore for quarter ended September 2012 to R118 crore for the three months to March 2013. Similarly,HDFC MF has brought down its investment to R244 crore from R302 crore,while UTI MF reduced its investment from R392 crore to R308 crore in the same period.


“Fund houses have reduced their allocation to consumer defensives in the past few months as valuations had become rich in that space,” said Dhruva Chatterji,senior research analyst,Morningstar India. Average exposure of mutual funds to consumer defensives reduced to 7.6% in February 2013 from 9.3% in August 2012.

In March,the allocation rose marginally to 8% as fund managers flocked to defensives following a fall in benchmark indices in February and March.

For the three months to March 2013,UTI MF (R308 crore) and HDFC MF (R245 crore) emerged as the top investors in HUL. Other fund houses with significant investments included Birla Sun Life MF (R142 crore),DSP BlackRock MF (R118 crore) and Franklin Templeton MF (R114 crore). The highest investment in HUL in the past 20 quarters was by DSP BlackRock MF of R417 crore for the quarter ended September 2011.

UTI MF has been one of most consistent investors in HUL,with the fund house investing more than R200 crore for six of the 11 half-yearly quarters beginning March 2008,for which data are


DSP BlackRock has been another heavyweight investor,with investments in excess of R100 crore for nine of the 10 half-yearly quarters under consideration.

HDFC MF,on the other hand,has invested more than R100 crore in eight of the 11 half-yearly quarters.