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Last Updated : Aug 14, 2019 06:16 PM IST | Source: Moneycontrol.com

MFs flocked to IndusInd, Kotak Mahindra Bank and Infosys in July

The weight of 'defensives' in the mutual funds portfolio rose 170 basis points in the month to 28.9 percent.

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Mutual fund managers showed where their preferences lay in July as they warmed up to 'defensive' sectors and private banks.

According to the Motilal Oswal report called 'Fund Folio', the weight of technology, consumer, utilities, healthcare, private banks, and oil & gas increased, while that of NBFCs, autos, PSU banks, capital goods, metals, infrastructure, and retail moderated.

The weight of 'defensives' in the mutual funds portfolio rose 170 basis points in the month to 28.9 percent.

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Consumer staples and healthcare are considered defensive sectors as they tend to maintain more price stability in a down market than other stocks.

Overall, barring telecom, all sectors showed an increase in the weightage.

Technology sector's weightage reached a five-month high of 9.2 percent. As a result, the sector overtook NBFCs to rank second in the sector allocation of mutual funds.

The top ranked sector was private sector banks.

In terms of month-on-month value increase, top 5 stocks in July were IndusInd Bank, Infosys, Kotak Mahindra Bank, Indian Oil Corp, and Sun Pharma.

While in terms of value decrease, five of the top 10 stocks were from financials—HDFC Bank, SBI, Axis Bank, Larsen & Toubro, and RBL Bank witnessed the maximum decline in value on a month-on-month basis.

The high market volatility of the past two months coupled with the lack of fiscal stimulus in the budget and the proposal to levy a surcharge on FPI led to low investor sentiment in July 2019.

Amid intermittent bouts of volatility, Nifty fell 5 percent in July.

Despite the elevated volatility and sharp correction in mid/small-caps, mutual funds witnessed inflows in its equity funds and in fact, contribution to systematic investment plans (SIPs) touched a record high of Rs 83.2 billion in July 2019.

Notably, foreign fund exodus of $1.9 billion was the highest since October 2018 as the Budget proposal on super-rich taxation and FPI surcharge hurt sentiment.

On the other hand flows from domestic institutional investors, spiked to $3 billion- the highest since October 2018 which was contributed by domestic mutual at $ 2.2 billion.

Total AUM of domestic MFs after declining 6.5 percent in June 2019 increased 1.2 percent on month to Rs 24.5 trln in July 2019, led by inflows in income/debt-oriented, equity and ETF schemes.

Equity schemes (including ELSS and arbitrage) saw net inflows increase to Rs 140 billion in July.

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First Published on Aug 14, 2019 06:05 pm
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