The second month of FY19-20 saw a notable change in the sector and stock allocation from the top 20 mutual fund houses.
On a month-on-month basis, MFs showed interest in capital goods, telecom, financials (private and PSU), and cement and chemical sectors, which witnessed an increase in weight.
For the same period, technology, healthcare, autos, consumer, metals, oil & gas, utilities, and media saw an MoM decrease in weight.
MFs were net buyers in 58 percent of the Nifty stocks in May as compared to 44 percent in April.
Private banks — the top sector holding of MFs — saw their weight increase for the eighth successive month, to climb to a new high of 19.7 percent, an increase of 40 basis points MoM and 330 bps YoY.
This was followed by Non-Banking Finance Companies (NBFCs) with 9.1 percent weight, technology with 8.5 percent, and capital goods with 8 percent.
According to a report from Motilal Oswal Financial Services titled ‘Fund Folio-Indian Mutual Fund Tracker', L&T was one of the preferred stocks among MFs in the month, with net buying by 15 funds. The company saw a value increase of Rs 55 billion in May, as the stock was up 15.6 percent.
SBI, HDFC Bank, ICICI Bank, HDFC Ltd, Axis Bank, Kotak Mahindra Bank, and Bajaj Finance were others who saw maximum value increase from MFs last month.
In terms of value decrease MoM, ITC, Infosys, Tata Motors, Aurobindo Pharma and Reliance Industries witnessed the maximum decline in value on an MoM basis. Last month, Nifty went up 1.5 percent.
Positive momentum in the domestic MF industry in the past two months, created a new record last month as the total assets under management (AUM) hit the Rs 25.9 trillion mark, up 4.6 percent, surpassing the previous high of Rs 25.2 trillion in August 2018.
Notably, the MF industry’s AUM has surged a staggering 3.9 times in the past 10 years. The MoM increase can be primarily attributed to a rise in AUM of income/debt, equity and ETF-oriented schemes.
In terms of inflows, equity schemes (including ELSS and Arbitrage) saw net inflows increase to Rs 97 billion in May as against 58 billion in April. The increase was led by higher gross inflows at Rs 278 billion in May, up 21 percent MoM, while redemptions were up 5 percent MoM at Rs 180 billion.