The ASX 200 shares that fund managers are buying and dumping

Let’s take a look.

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Key points

  • Local fund managers are shunning ASX 200 bank shares, especially ANZ and Westpac, according to JPMorgan 
  • Professional investors are upping their exposure to defensive and energy shares 
  • Some ASX 200 shares they have been buying during the March quarter include Telstra, Woodside Petroleum and South32 

Looking at the S&P/ASX 200 Index (ASX: XJO) shares the professionals are buying and selling during these volatile times have yielded a few surprises.

Local fund managers have been shying away from ASX banks ahead of the RBA’s interest rate decision today.

That’s the finding reported in JP Morgan’s Fund Manager Radar report, which noted a 63-basis point (bp) decline in bank holdings among domestic institutions.

ASX 200 shares facing a bank run

That decline is the largest among this cohort since the March quarter of 2020. It was two ASX big bank shares in particular that were being dumped.

These were the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price and Westpac Banking Corp (ASX: WBC) share price. Holdings of ANZ Bank shares among local fundies plunged 111 bps while Westpac tumbled 160 bps.

One ASX bank bucking the trend

But Australian fundies weren’t shunning all ASX 200 bank shares. In fact, there the National Australia Bank Ltd. (ASX: NAB) share price seemed to have found favour with the group.

“Over the past year, WBC has seen the largest scaling back by domestic instos (-320bp), with NAB being the only gainer (+40bp),” said JPMorgan.

“This lines up with our Love Index that shows only NAB in [the] ‘well-held’ [category], with all the other majors now in ‘under-held’.”

The ASX sectors professionals are buying into

The Love Index looks at the top 10 holdings of ASX 200 shares to determine which names are favoured by professional investors in the quarter and which aren’t.

While these investors have lightened their load on financial shares, they have been increasing their exposure to defensive and energy shares.

JPMorgan noted that allocation to defensives now stands at a five-year high. The weighting to energy has increased for the fourth consecutive month.

“March saw our universe of managers continue their shift to a more defensive footing (+10bp),” said JPMorgan.

“This marks a continuation of the pivot that started mid-last year, with the 1-year lift in defensive holdings approaching 70bp.”

ASX 200 shares fund managers are buying and dumping

There are three ASX 200 shares that have moved up into the “well-held” category on the Love Index in the latest quarter.

They include the Telstra Corporation Ltd (ASX: TLS) share price, Woodside Petroleum Limited (ASX: WPL) share price and South32 Ltd (ASX: S32) share price.

Meanwhile, ASX 200 shares that have fallen into “underheld” territory include the Woolworths Group Ltd (ASX: WOW) share price, Newcrest Mining Ltd (ASX: NCM) share price and ANZ Bank share price.

Motley Fool contributor Brendon Lau has positions in Australia & New Zealand Banking Group Limited, National Australia Bank Limited, Newcrest Mining Limited, South32 Ltd, Telstra Corporation Limited, and Westpac Banking Corporation. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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