Fears of a liquidity crunch following the IL&FS crisis hit the mutual fund industry in September. Cash plans, or liquid funds, were the worst hit
The S&P BSE Sensex plunged more than 2,400 points, or 6.2 percent, in the month of September, thanks to falling rupee, rally in crude oil prices, rise in interest costs as well as macro headwinds. These factors impacted mutual fund (MF) industry as well.
MF industry's assets de-grew to Rs 22 lakh crore on the back of volatile markets in September and large outflows from liquid funds, the ICICIdirect research said in a note. Mutual Funds asset base was at a record Rs 25.20 lakh crore by August-end.
Equity-oriented funds constitute 46 percent, debt funds constitute 33 percent and liquid funds constitute 18 percent of the total assets. The monthly drop in the asset base is mainly due to an outflow of over Rs 2 lakh crore from mutual fund schemes.
Debt and liquid funds predominantly have institutional investors, while equity-oriented funds mostly have individual investors.
Redemption pressure was evident in liquid funds which saw a withdrawal of Rs 2.11 lakh crore. Liquid funds, or money market segment, invest in cash assets such as treasury bills, certificates of deposit and commercial paper for a shorter horizon.
Fears of a liquidity crunch following the IL&FS crisis hit the mutual fund industry in September. Cash plans, or liquid funds, were the worst hit.
MF experts said industry faced huge redemption pressure in September after liquidity in the banking system tightened.
Despite steep fall in equity markets, equity and equity-linked saving scheme (ELSS) saw an infusion of Rs 11,250 crore. Besides, balanced funds witnessed an inflow of Rs 731 crore.
The S&P BSE Sensex lost more than 6.2 percent in September — the worst fall in the month of September since 2008. The Sensex had fallen by about 10 percent in September 2008.
Among largecaps, stocks like Vedanta, NMDC, Adani Ports, Asian Paints, and Ashok Leyland witnessed highest buying during the month of September 2018, according to a report by ICICIdirect.com.
In mid-cap space, stocks like Adani Enterprises, Syngene International, LIC Housing, Prestige Estate, and Alkem Laboratories witnessed highest buying during September 2018.
Among smallcaps, stocks like Gujarat Fluoro, V-Mart, SpiceJet, KPIT Technology and IFGL Refractories witnessed highest buying during the month of September 2018.
Top 10 stocks which witnessed selling pressure:
In the large-cap space, stocks which saw selling by AMCs were Shriram Transport Finance, Wipro, ICICI Lombard, United Breweries and L&T Finance Holdings.
Midcap stocks which saw selling by AMCs were Dewan Housing, PC Jeweller, HDFC AMC, Reliance Capital and Tata Communication.
Small cap stocks which saw selling by AMCs were Monsanto India, Balrampur Chini, Techno Electric, Infibeam Avenues and Kaveri Seeds.
Disclaimer: The above report is compiled for information only and are not buy or sell ideas. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Not sure which mutual funds to buy? Download moneycontrol transact app to get personalised investment recommendations.