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MOSL: FUND FOLIO (February 2018)- Indian Mutual Fund Tracker — An encouraging start to the new year-defensives see buying

FUND FOLIO (February 2018): Indian Mutual Fund Tracker — An encouraging start to the new year; defensives see buying

 

An encouraging start to the new year

• Domestic MFs have begun CY18 on a positive note. Equity AUM rose for the 14th consecutive month in January to scale a new high of INR7.9t (+2% MoM, +58.4% YoY).
• The increase in equity AUM was led by a rise in market indices (Nifty +4.7% MoM) and higher equity schemes sales (INR472b, +17.5% MoM). Redemptions rose sharply by 32% MoM to INR318b, leading to a decrease in net inflows (INR154b, -4.3% MoM).
• Total AUM of the MF industry rose 4.8% MoM to INR22.4t in January, primarily led by an increase in AUM of liquid funds (INR847b), equity funds (INR158b), balanced funds (INR87b) and ETFs (INR26b).

 

Some interesting facts

• The month saw a notable change in sector and stock allocation of funds. On an MoM basis, the weight of Private Banks, Technology, Utilities, Capital Goods and Media increased, while that of Autos, Healthcare, Metals, Telecom and Cement showed signs of moderation.
• Defensives’ weight rose to a 10-month high of 24.6% (+30bp MoM), as the weight of Technology and Utilities rose 50bp and 10bp MoM, respectively, while that of Healthcare and Telecom moderated. Global and Domestic Cyclicals’ weight fell 20bp and 10bp MoM to 10% and 65.4%, respectively.
• After declining for five consecutive months, the weight of Private Banks increased to 16.6% (+70bp MoM) in January. Technology’s weight increased (+50bp MoM) to 6.8% in January after moderating in the past few months.
• Of the top 10 stocks in terms of value increase MoM, six were from Financials.