Mutual funds trimmed their exposure to PSU banks in May 2026, taking the sector's weight in their portfolios to an eight-month low of 3.4%, down 20 basis points from the previous month, according to Motilal Oswal's latest Fund Folio: Indian Mutual Fund Tracker.
Despite the monthly decline, the allocation remains 60 basis points higher than a year ago. The report also showed that PSU banks remained among the sectors most under-owned by mutual funds relative to their weight in the BSE 200 index.
