HDFC Bank, ICICI Bank, Infosys Among Top Mutual Fund Buys in February, While SBI, Bajaj Finance See Selling Pressure

Equity Mutual Funds Witness Strong Inflows in February 2026

Key Highlights

• Domestic equity mutual funds recorded inflows of ₹37,600 crore in February 2026, marking a 2% month-on-month decline.
• Mutual funds selectively increased exposure to certain sectors while trimming positions in others.
• The top five sectors where domestic mutual funds are overweight compared with the BSE 200 remain unchanged from January.

Sectoral Allocation

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• Pharmaceuticals & Healthcare is the most overweight sector with a 1.2% higher allocation than the BSE 200, followed by:
  • E-commerce (0.8%)
  • Consumer Durables (0.6%)
  • Capital Goods (0.6%)
• Mutual funds have also built exposure to sectors such as Ceramics, Plyboards & Glass, Media, Sugar, and Diversified.

Underweight Sectors

• Domestic mutual funds remain underweight in several large sectors relative to the benchmark, including:
  • Private Banks (-3.4%)
  • Oil & Gas (-3.1%)
  • Metals & Mining (-1.8%)
  • Consumer (-1.7%)
  • IT Services (-1.5%)

Cash Holdings and Buying Activity

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• Mutual funds slightly increased their cash holdings during the month, with cash levels standing at ₹2,09,800 crore (4.7% of total equity AUM).
• Private banks saw the highest buying activity by mutual funds, with purchases worth ₹16,412 crore.
• IT services was the second-largest buying segment, with purchases worth ₹12,741 crore.

Selling Activity

• PSU banks topped the list with a sell value of ₹8,911 crore.
• The NBFC sector also witnessed heavy selling of about ₹6,127 crore.