ASX bank shares have been turbulent so far this year. After starting in the green, a wave of macroeconomic crosscurrents weighed on the sector, resulting in widespread losses.

For Westpac Banking Corporation (ASX: WBC), the story has been no different. Its share price has gained less than 1% year to date, since falling off highs of $24 early in June. The bank closed on Wednesday at $21.41 a share.

For fellow 'big four' banking giant, National Australia Bank Ltd (ASX: NAB), the picture is a little more positive. Its share price has climbed more than 11% this past month, extending gains to around 4.6% this year to date.

Investment manager makes the switch

Yet, portfolio managers at Amcil Ltd (ASX: AMH) recently dumped their NAB position, according to the investment company's preliminary annual results.

Amcil is a listed investment company (LIC) that manages a concentrated equity investment portfolio of ASX shares.

The company made a switch in its allocation of ASX banks. It said the "…transaction saw a switch in our major bank investments, with Westpac replacing National Australia Bank, primarily for reasons of relative valuation".

Westpac trades at 15.36 times trailing P/E whereas NAB is priced at 14.93 times trailing P/E. Each share has an earnings yield of roughly 6.5%.

Amcil realised $14.7 million in proceeds from the transaction, whereas it purchased $14.07 million in Westpac equity.

Those weren't the only changes the portfolio managers made. They added seven new companies throughout the period, including names such as Netwealth Group (ASX: NWL) and Domino's Pizza Enterprises Ltd (ASX: DMP).

They also disposed of Xero Ltd (ASX: XRO), Sydney Airport (ASX: SYD), and Ramsay Healthcare Ltd (ASX: RHC).

As for its projections moving forward, Amcil notes the impending headwinds looming on the horizon:

The equity market impact of higher inflation and interest rates is moving from a focus on valuation multiples, to concern over the outlook for corporate earnings. Cost-of-living pressure for consumers is driving many economic indicators sharply lower, a necessary condition for bringing inflation back to more sustainable levels.

The ability of companies to grow their market share against weaker competitors, pass on cost inflation in higher prices to preserve profit margins and rely on balance sheet strength to navigate volatile trading conditions will be particularly important in the year ahead.

Amcil is down almost 17% this year to date and 12% lower for the year.

The post Why this ASX investment company dumped NAB for Westpac shares appeared first on The Motley Fool Australia.