Mutual funds continued to trim their exposure to private sector banks during April 2026, according to a report by The Economic Times. The allocation to the sector declined on both a monthly and yearly basis, even as private banks retained their position as the largest sectoral holding in mutual fund portfolios.
Several other sectors, including technology, healthcare and automobiles, also recorded moderation in portfolio weights during the month.
The weightage of private banks in mutual fund portfolios stood at 17.3% in April 2026, reflecting a decline of 30 basis points compared with March 2026.
On a year-on-year basis, the allocation was lower by 150 basis points from 18.8% recorded in April 2025.
The data indicated that mutual funds reduced exposure to the sector for the second consecutive month.
According to the report, the sector weight for private banks was:
| Period | Weightage |
| April 2026 | 17.3% |
| March 2026 | 17.6% |
| April 2025 | 18.8% |
Despite the decline, private banks continued to account for the highest sector allocation within mutual fund holdings during April 2026.
Apart from private banks, several sectors recorded a month-on-month reduction in portfolio allocation during April.
These included:
The moderation reflected portfolio adjustments across sectors by mutual fund managers during the month.
Private banks remained the largest sectoral exposure for mutual funds in April 2026 with a weightage of 17.3%.
Other major sector holdings included:
| Sector | Weightage |
| Private Banks | 17.3% |
| Automobiles | 8.4% |
| Capital Goods | 7.8% |
| Healthcare | 7.5% |
Sector allocation trends are closely tracked by market participants as they may indicate changes in institutional investment preferences and broader market positioning.
Changes in mutual fund exposure across sectors can be influenced by earnings outlook, valuation levels, macroeconomic conditions and market sentiment.
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Mutual funds reduced their allocation to private banks for the second straight month in April 2026, although the sector remained the largest holding in portfolios. Other sectors such as technology, healthcare and automobiles also saw moderation in allocation during the month.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 27, 2026, 3:01 PM IST
Neha Dubey
Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.
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