Mutual Funds hitch a ride on auto stocks for a drive in the fast lane

Auto sector mutual funds are the second top performers among the sector mutual funds categories in the last one year and they have delivered an average return of 30 percent. Within the sector fund categories, PSU Bank ETFs topped the chart.
There are two Exchange Traded Funds (ETFs) -- ICICI Pru Nifty Auto ETF and Nippon India Nifty Auto ETF and, an index fund -- ICICI Pru Nifty Auto Index Fund tracking the Nifty Auto index. There are five active schemes also on offer that follow the transportation and logistics theme including the newly launched Aditya Birla Sun Life Transportation and Logistics Fund. Experts believe that strong performance by the automakers was aided by strong demand across segments, improving mix, operating leverage and lower commodity prices.

Deepak Jasani, Head of Retail Research, HDFC securities says “Things are turning around for the auto sector after semiconductor shortages in 2022 and early 2023. Post Covid-19, the demand has been strong. Use of personal transport vehicles increased and customers started spending on new cars. Due to long waiting periods, manufacturers pulled back discounts which were being offered earlier resulting in higher realisations. Softening of raw material prices led to operating margin expansion. Manufacturers increased their prices to pass on the increase in raw material inflation. Increased Government spending provided a boost to CV and construction equipment sales”. Here are the most popular auto and auto component stocks among the active mutual fund managers. Only actively-managed schemes were considered. Data shown below is as of September 30, 2023. Source: ACEMF.

Maruti Suzuki India
No. of active schemes holding the stocks: 265
Market value: Rs 30,575 crore

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Mahindra & Mahindra
No. of active schemes holding the stocks: 209
Market value: Rs 18,418 crore

Tata Motors
No. of active schemes holding the stocks: 186
Market value: Rs 13,438 crore

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TVS Motor Company
No. of active schemes holding the stocks: 143
Market value: Rs 13,031 crore

Samvardhana Motherson International
No. of active schemes holding the stocks: 114
Market value: Rs 7,280 crore

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Hero MotoCorp
No. of active schemes holding the stocks: 105
Market value: Rs 6,299 crore

Schaeffler India
No. of active schemes holding the stocks: 104
Market value: Rs 7,277 crore

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Bajaj Auto
No. of active schemes holding the stocks: 96
Market value: Rs 3,933 crore

UNO Minda
No. of active schemes holding the stocks: 91
Market value: Rs 5,236 crore

Eicher Motors
No. of active schemes holding the stocks: 79
Market value: Rs 3,519 crore

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