MOSL: FUND FOLIO (October 2017)-Indian Mutual Fund Tracker — Momentum intact-NBFCs now feature in the top three

​FUND FOLIO (October 2017): Indian Mutual Fund Tracker — Momentum intact; NBFCs now feature in the top three

AUM rises for the 16th consecutive quarter

• Domestic MFs maintained their positive momentum in September – industry average AUM increased for the 16th consecutive quarter in 3QCY17 (+7.3% QoQ) to touch a new high of INR21t. On a YoY basis, average AUM increased 29.9% (INR4.8t) in September 2017, primarily on account of inflows in growth (equity), income and liquid funds, backed by increased participation of domestic investors in equity schemes.
  
• Equity AUM rose for the 10th consecutive month in September to scale a new high of INR6.6t (+2.4% MoM and +40.8% YoY), led by an increase in equity scheme sales (INR343b, +5.7% MoM). Redemptions rose 27% MoM to INR154b and market indices were down (Nifty -1.3% MoM), leading to a fall in net inflows (INR189b, -7% MoM).
  
• Equity AUM, as % of total AUM, rose 100bp MoM to 32.3% in September. Equity AUM now accounts for 5% of India’s market capitalization.
  

Some interesting facts

• The month saw a notable change in sector and stock allocation of funds. On an MoM basis, the weights of NBFCs, Healthcare and Technology increased, while those of Banks (PSU and Private), Cements, Metals, Capital Goods, Consumer and Telecom showed signs of moderation.
  
• NBFC sector’s weight reached a new high of 8.4% (+30bp MoM and +190bp YoY). As a result, the sector overtook Capital Goods to take the third position in sector allocation of mutual funds – it was at the sixth position 12 months ago.
  
• After increasing for 15 consecutive months, the weight of Metals declined in September to 3.7% (-10bp MoM). Healthcare’s weight increased (+20bp MoM) to 6.5% in September after two consecutive months of decline.
  
• Of the top 10 stocks in terms of value increase MoM, three were from Healthcare.
  
• Bajaj Finance, which entered the Nifty-50, was one of the preferred stocks among MFs in September, with net buying by 12 funds. Value increased by INR12.1b, with the stock up 2.9% for the month.