Ninety-three mutual funds operated by 14 companies reduced their stock holdings by 50 billion yuan (US$6.47 billion) in the first three months, the Shanghai Securities News reported today.

Equity-focused funds slashed the proportion of stocks in their portfolios by 5.58 percentage points during the period, the newspaper said, without providing any details.

The stock disposals were in line with the need to have a larger proportion of cash in the funds' portfolios to cope with market changes in times of high volatility, the paper said, citing managers at China Southern Fund Management Co.

Chinese mainland stocks more than doubled in value in 2006 on restored investor confidence. However, profit-taking made benchmark indices seesaw early this year before they again topped all-time highs this month.

The favorite industries for fund managers in the first quarter were the steel and financial sectors, the newspaper said, citing Shanghai Wind Info.

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