"Most of the fund managers have shifted to three areas -- IT, pharma and FMCG," says KN Atmaramani of Tata Mutual Fund. "With recession in the economy, fund managers have realised that gains will come from sectors that will grow -- recession or no recession," says a Mumbai-based fund manager.

For a sample, consider this. ACC, the largest cement maufacturer in the country, is currently held only by DSPML Equity and Tata Core Fund. The latter, as its name suggests, has an objective of investing in core sectors like cement, steel, etc.

While Bombay Dyeing is conspicuous by its absence, only Tata Core, Tata EGF and Templeton IGF holdBajaj Auto. Templeton being a value fund is a contrarian. It invests in sectors which are currently out of favour. Gujarat Ambjua and L&T figure only in the portfolios of Templeton, Tata Core and Tata EGF. The market darling and a favourite of punters, Reliance currently finds a place in Reliance Vision and Growth, the two funds from Reliance AMC, Tata Core, Templeton, Chola Freedom, Apple Platinum and DSPML Equity Fund.

Only three traditional counters -- ITC, HLL and SBI still continue to be picked up across the board. While ITC and HLL are FMCG stocks with high growth, SBI has a dominant position in the finance sector. Private mutual funds are also now increasingly turning to the new crop of bank stocks -- especially Corporation Bank, Bank of Baroda, etc. Some of the stocks that are spread across the top 10 holdings of a majority of the private equity funds include Infosys, Satyam Computer, SmithKline Beecham Pharma, HLL, Castrol, Pfizer, HDFC, TVS Suzuki, MTNL and BPCL. In the case of public sectormutual funds like UTI or institutions and banks like PNB, BoI and LIC, traditional blue chips like ACC, Grasim, Indian Rayon, Telco and Tisco prominently figure among the top 10 holdings. Most public sector funds do not very actively restructure or churn their portfolios, besides the size of their funds which is huge, the average corpus of the growth fund being around Rs 500 crore. "With such a huge corpus, these funds cannot invest only in IT or pharma scrips because the floating stock is low. Thus, they have to invest in companies like Reliance or ACC, whose equity can absorb large doses of funds," says a Chennai-based fund manager. It may be pointed out a number of public sector funds picked up these stocks at very low prices and continue to hold them since they do not suffer losses. Most private sector funds, with their small corpus, can afford to pick up stocks from non-cyclical sectors whicb provide handsome returns. "Private sector funds have shown a greater appreciation in NAV in the past," saysAtmaramani. However, once private sector funds attract fresh money and corpus gorws, they would have no option but to turn to companies with large equity base like Reliance, Telco and Tisco.

"The definition of blue chip has changed. Today, blue chip means Indian companies that are globally competitive and are growing steadily," says Vivek Reddy of Kothari Pioneer AMC. "Scrips like Infosys, Saytam and Pfizer are now in the forefront of any rally," says a fund manager.

Although heavyweights have been relegated to the background, some fund managers believe it is a temporary phenomenon.