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MOSL: FUND FOLIO (February 2019)-Indian Mutual Fund Tracker — Equity AUM consolidates in Jan’19

FUND FOLIO (February 2019): Indian Mutual Fund Tracker — Equity AUM consolidates in Jan’19; Gross inflows lowest since Apr’17

 

Key observations

• Equity AUM of domestic mutual funds (MF) bucked the trend of the previous two months, declining 1.6% MoM to INR8.3t in Jan’19 (increased by 4% in Nov’18 and 1.6% in Dec’18).
• The fall in equity AUM can be attributed to the volatile markets in Jan’19 (Nifty down 0.3%). While equity scheme sales declined 4.6% MoM to INR209b, redemptions fell by 9.5% MoM to INR158b. Net inflows, thus, rose from INR44b in Dec’18 to INR51b in Jan’19.
• Total AUM of the MF industry rose 2.2% MoM to INR23.4t in Jan’19, primarily led by an increase in AUM of liquid funds (by INR629b) and income funds (by INR57b).
• Equity AUM, as a percentage of India’s market capitalization, increased 80bp YoY to 5.9% in Jan’19.
• Equity mutual funds attracted steady flows, largely due to investor participation through systematic investment plans (SIPs). Total amount garnered through SIPs stood at INR80.6b in Jan’19 (+21% YoY and up 2x in two years).

 

Some interesting facts

• The month saw a notable change in sector and stock allocation of funds. On MoM basis, the weightage of Technology, Private Banks, Consumer, Oil & Gas and Healthcare increased, while that of Automobiles, NBFCs, Capital Goods, Utilities, Cement, Metals, Infrastructure, Media and Telecom moderated.
• Technology sector’s weightage reached 32-month high of 9.5% (+90bp MoM, +270bp YoY). As a result, the sector overtook NBFCs to take the second position in the sector allocation of mutual funds – it was at the fifth position about 12 months ago.
• Private Banks — the top sector holding of MFs saw its weightage increase for four successive months to climb to a new high of 18.5% (+100bp MoM, +200bp YoY).