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MOSL: FUND FOLIO (March 2018)-Indian Mutual Fund Tracker — MFs break 14-month gaining streak-equity AUM down 1.3% MoM in February

FUND FOLIO (March 2018): Indian Mutual Fund Tracker — MFs break 14-month gaining streak; equity AUM down 1.3% MoM in February

 

NBFCs overtook Capital Goods to take the third position in sector allocation

• Domestic MFs’ equity AUM broke a 14-month gaining streak to fall 1.3% MoM in February. The fall in equity AUM was led by fall in market indices (Nifty fell 4.9% MoM – the highest month-on-month decline in two years) and lower equity scheme sales (INR346b; down 26.7% MoM).
• Redemptions fell sharply by 42.3% MoM to INR184b, leading to an increase in net inflows (INR163b; up 5.7% MoM).
• Total AUM of the MF industry fell 0.9% MoM to INR22.2t in February, primarily led by a decrease in AUM of equity funds (down INR101b), income funds (down INR99b), and other ETFs (down INR30b).
• Equity AUM as a percentage of India’s market capitalization is at an all-time high of 5.3% (up 90bp YoY).

 Some interesting facts

• The month saw a notable change in sector and stock allocation of funds. On an MoM basis, the weights of Technology, Telecom, Utilities, Consumer, Metals, Autos, NBFCs, Retail, and Healthcare increased, while those of Banks (private and state-owned), Capital Goods, and Oil & Gas moderated.
• Capital Goods sector’s weight decreased to 8.4% (-30bp MoM; +10bp YoY). As a result, the sector fell to fourth position in sector allocation of mutual funds.
• NBFC sector’s weight increased to 8.5% (+10bp MoM and +200bp YoY). As a result, the sector overtook Capital Goods to take the third position in sector allocation of mutual funds – it was at the seventh position 12 months ago.