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MOSL: FUND FOLIO (June 2018): Indian Mutual Fund Tracker — AUM consolidates in May-Financials, Technology, and Consumer see buying

FUND FOLIO (June 2018): Indian Mutual Fund Tracker — AUM consolidates in May; Financials, Technology, Consumer see buying

 

Key observations

• After rising by 6.7% in the previous month, domestic mutual funds’ (MF) equity AUM declined marginally by 0.3% MoM to INR7.98t in May.
• The fall in equity AUM was driven by a flattish performance of the markets (Nifty). While equity scheme sales were up 4.6% MoM to INR282b, redemptions rose 10.9% MoM to INR161b. Consequently, net inflows declined from INR124b in April to INR121b in May.
• Total AUM of the MF industry fell 2.8% MoM to INR22.6t in May, primarily led by a decrease in AUM of liquid funds (down by INR584b), income funds (down by INR52b), balanced funds (down by INR33b) and equity funds (down by INR21b).
• Net inflows for the MF industry in CY18YTD stand at INR1.5t, 41% of which is contributed by equity funds. All categories of funds – except income, GILT, gold ETFs and FOF – witnessed positive inflows.
• Equity AUM, as a percentage of India’s market capitalization, is at an all-time high of 5.4% (+80bp YoY, +20bp MoM).

 Some interesting facts

• The month saw a notable change in sector and stock allocation of funds. On an MoM basis, the weights of Financials, Technology, Consumer and Oil increased, while those of Capital Goods, Healthcare, Autos, Metals, Infrastructure, Cement, Utilities, Telecom, Real Estate and Chemicals moderated.
• Technology (weight up 30bp MoM or 120bp YoY to 8%) overtook Capital Goods (weight down 40bp MoM or 100bp YoY to 7.7%) to take the fourth position in terms of sector allocation of mutual funds.
• Of the top 10 stocks in terms of value increase MoM, six were from Financials.
• SBI saw a value increase of INR28b in May, as the stock was up 9.3%. Notably, the stock saw net buying by 11 of the top 20 funds.
• HDFC was also one of the preferred stocks among MFs in May, with net buying by 16 funds. Value increased by INR9.7b, despite the stock delivering negative return of 3% in the month.
• Power Grid, one of the least preferred stocks among MFs in May, saw net selling by 13 funds. Value decreased by INR18.7b, despite the stock closing up by 0.6% in the month.