The last month of FY20 saw a notable change in the sector and stock allocation by mutual funds.
On a month-on-month basis, the weight of consumer, healthcare, technology, oil and gas, telecom and utilities increased, a report titled 'Fund Folio' by Motilal Oswal Financial Services stated.
NBFCs, capital goods, metals, automobiles, chemicals, real estate, infrastructure and cement saw a month-of-month decrease in weightage.
MFs were net buyers in 74 percent of the Nifty stocks last month.
Weightage of defensives’ increased by 600 basis points to 33.5 percent, domestic cyclicals’ weight decreased by 520 bps to 56.4 percent. (100 bps=1 percentage point)
Consumer weight increased for the third successive month to touch a new high of 9.8 percent. The sector is now second in terms of sector allocation by mutual funds – it was at the fifth position 12 months ago.
In terms of value, a month-on-month decrease was seen in eight of the top 10 stocks. These were from the financials space: ICICI Bank, HDFC Bank, Axis Bank, SBI, Bajaj Finance, HDFC and Kotak Mahindra Bank, and IndusInd Bank.
In March, maximum MoM change in terms of value was seen in Tata Consumer, Hindustan Unilever, Dr Reddy’s Laboratories, Hindustan Petroleum Corporation (HPCL) and Lupin, Tata Consultancy Services (TCS), Biocon, Bharat Electronics, GSK Consumer Healthcare and Cipla.Number crunching
As the coronavirus (COVID-19) pandemic wreaked havoc across the globe, the Nifty saw the worst finish to a financial year in a decade.
With India in the midst of a complete lockdown, the Nifty plunged 23 percent to close at 8,598 (down 26 percent YoY) in March.
Nevertheless, mutual fund investors appeared undeterred by the market nervousness.
Contribution of systematic investment plans (SIPs) hit a new high of Rs 8,640 crore in March, up 7.3 percent YoY.
Total amount garnered through SIPs stood over Rs 1 lakh crore in FY20 against Rs 92,700 crore in FY19.
Equity AUMs of domestic MFs declined to Rs 6.6 lakh crore in FY20 – the lowest level since October 2017 – led by a decline in market indices and increase in redemptions.
However, an increase in sale of equity schemes restricted the decline in net inflows to Rs 88,000 crore in FY20 from over Rs 1.08 lakh crore in FY19.
The mutual fund industry’s average AUM increased 10.7 percent YoY to Rs 27.1 lakh crore in FY20, primarily led by inflows in equities, exchange traded funds (ETFs) and income categories.