Mutual funds lift investments in IT stocks in October, rebounding from a 67-month low

Synopsis

Mutual funds slightly increased IT sector exposure to 7.6% in October, reversing a multi-year low. The Motilal Oswal report shows rising interest in Technology, NBFCs, PSU banks and telecom, while autos, utilities and cement saw reduced weightings. Several fund houses now hold over 8.4% IT allocation, with Mirae Asset schemes topping recent performance charts.

Mutual funds have inched up their investments in IT stocks to 7.6% in October after touching a 67-month low in September 2025.

The investments on monthly basis have gone up by 10 basis points from 7.5% in September to 7.6% in October whereas on a yearly basis, the investment has gone up by nearly 130 basis points from 8.9% in October 2024, according to a report by Motilal Oswal Financial Services.

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Source: Motilal Oswal Financial Services report

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The report further highlighted that in October 2025, mutual funds showed interest in Technology, NBFCs, Oil & Gas, PSU Banks, Telecom, and Consumer Durables, leading to a MoM rise in their weights. Conversely, Automobiles, Utilities, Cement, Chemicals, and Textiles saw a MoM moderation in weights.

Private banks with 17.3% weight was the top sector holding for mutual funds in October, followed by Automobiles (8.3%), Technology (7.6%), and Healthcare (7.4%).

The allocation in the BSE 200 index was 8.4% and some fund houses such as Aditya Birla Sun Life Mutual Fund, DSP Mutual Fund, ICICI Prudential Mutual Fund, Tata Mutual Fund, and UTI Mutual Fund had over 8.4% allocation in IT stocks.

The top sectors where MF ownership vs. the BSE 200 is at least 1% lower areOil & Gas (17 funds under-owned), Consumer (17 funds under-owned), Private Banks (16 funds under-owned), Utilities (13 funds under-owned), and Technology (11 funds under-owned).

According to the report, the technology sector was among the top sectoral holdings for most of the fund houses but was not the top sector allocation in case of Quant Mutual Fund.

Also Read | MFs increase cash allocation by Rs 10,000 crore to over Rs 2 lakh crore in October

At present, there are 32 funds based on technology or IT stocks including active and passive funds that have completed three years of existence in the market. Three funds from Mirae Asset Mutual Fund - Mirae Asset Global X Artificial Intelligence & Technology ETF FoF, Mirae Asset Hang Seng TECH ETF FoF, and Mirae Asset Hang Seng TECH ETF were the top performers in the last three month period.

These three schemes gave 11.25%, 10.39%, and 8.63% returns respectively in the last three months. Franklin India Technology Fund offered the lowest positive return of 4.09% in the last three years.

Quant Teck Fund lost around 0.38% in the last three month period, according to the data by ACE MF.