Mutual funds' portfolio value in equities beat LIC's share

Himadri BuchMoneycontrol

A 44-player domestic mutual fund industry has beaten the largest state-run insurer LIC in terms of value of holdings in companies, reveals a data from PRIME Database.

As on end of September quarter, the total value of mutual fund equity portfolio in listed firms stood at Rs 4.94 lakh crore as against Rs 4.75 lakh crore held by LIC, shows a data collated by PRIME Database.

Pranav Haldia, MD of PRIME Database, said that July-September was the first quarter where company holdings of mutual funds was more than that of mutual funds’ holding in NSE-listed companies.

In FY14, LIC had invested Rs 2.25 lakh crore in equities which was increased to about Rs 3 lakh crore in FY15.

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Fund managers attributed the rise in value of stocks to continuous inflows in equity schemes. Also, a few have chalked up this change to the investment strategy followed by LIC.

This was the first quarter wherein stakeholding of LIC has been exceeded by MFs' stake in NSE-listed companies, according to Haldia. 

“This data clearly reflects the fresh inflows that are coming to MFs, and getting deployed in the market. In the last few days, flows have been decent. It seems the investors continue to maintain their confidence over the long-term potential of Indian equities,” said Sadanand Shetty, Vice President and Senior Fund Manager at Taurus Mutual Fund.

With Sensex gaining nearly 10 percent in the first six months of this financial year, investors rushed to deploy money in equity mutual fund schemes.

According to the data on Association of Mutual Funds in India or AMFI, mutual funds witnessed net inflows worth Rs 19,829 crore in pure equity schemes, Rs 11,828 crore in balanced schemes and Rs 2,404 crore in ELSS schemes during April-September between April and September.

Among NSE-listed companies, LIC augmented holding in 38 companies in the July-September quarter, pared holding in 71 companies.  Mutual fund holdings were diversified across 1,088 companies while LIC has invested in merely 310 firms.

During the September quarter, mutual funds raised their holding in 338 companies and reduced in 322 stocks, Haldia said.

Currently, LIC is readjusting its investments as a part of fresh strategies in the insurance market. The insurer is increasing its focus on pension and annuity business, which calls for higher fixed-income investments.

LIC continued to beat mutual funds in terms of total assets. As on end of September quarter, the 44 mutual fund houses, managed an average Rs 16.10 lakh crore of investor assets, as per the data on AMFI. In comparison, LIC, manages total assets worth Rs 21 lakh crore for at least 25 crore people via 30 crore policies.