Mutual Fund equity net flows were slightly lower than last month, at ₹15480 crore in June 2022 versus ₹17670 crore in May 2022. The decline comes on the back of an adverse macro backdrop, with heightened worries about rising interest rates, elevated crude oil prices, and liquidity tightening.
A report by brokerage house Phillip Capital noted that among sectors, the auto and ancillary sector saw higher buying with its weight at 7.7 percent, up 47 bps MoM, followed by Oil & gas (at 7.2 percent, up 21 bps), Staples (at 5 percent, up 17 bps), and Healthcare (at 6.9 percent, up 14 bps).
Meanwhile, MFs reduced holdings in Financials (weight at 30.4 percent, -50 bps MoM), Metals & Mining (weight at 2.6 percent, -25 bps), and Building Materials (weight at 3.6 percent, -11 bps).
The brokerage also listed top buys and Sells across sectors by MFs.
The top 5 stocks bought by mutual funds in June are:
Large caps – NTPC, ONGC, Bharti Airtel, Hindalco, Vedanta.
Midcaps – Motherson Sumi Wiring, IDFC First Bank, IEX, National Aluminium, IDFC.
Small Caps – SJVN, Aether Industries, Gateway Distriparks, Restaurant Brands, Paradeep Phosphates.
Meanwhile, the top 5 stocks sold by MFs in June are:
Large caps – Ambuja Cements, Zomato, ITC, SBI, Power Grid.
Mid-caps – Vodafone Idea, Ashok Leyland, GMR Infra, L&T Finance, NHPC.
Small Caps – RBL Bank, Indiabulls Housing Finance, Equitas Bank, NBCC, City Union Bank.
Sector-wise analysis by the brokerage:
Auto & Ancillary: In the auto sector, Motherson Sumi, M&M, Samvardhana Motherson, Maruti Suzuki, andApollo Tyres were bought the most by equity mutual funds in June. The auto sector's weight increased for the third consecutive month to a 42-month high and now the sector ranks third in the allocation of mutual funds.
Oil & gas: ONGC, Reliance, HPCL, Petronet, and Gujarat Gas were the highest bought stocks in the oil and gas space. The surge in crude oil prices has made these stocks a good investment bet for investors and mutual funds alike.
Staples: Emami, GCPL, Marico, HUL, and Tata Consumer Products were bought the most in the consumer space. While the rise in raw material prices is a key headwind for the sector, the price hikes taken by the consumer firms is a key positive.
Healthcare: Sun Pharma, Fortis Healthcare, Zydus Lifesciences, Laurus Labs, and Gland Pharma are the top stocks bought by equity funds in June in this space.
Financials: In this space, the equity MFs have sold RBL Bank, SBI, L&T Finance, REC, and Indiabulls Housing Finance the most. The weight of private banks moderated in June after rising for two consecutive months. However, despite the decline in June, private banks remained the top sector holding for MFs in the month at 17.5 percent
Metals & Mining: Tata Steel, JSPL, Hindustan Copper, SAIL, and Welspun were the most sold stocks by equity MFs in June in this space. The metal sector has performed very poorly in recent times on the back of rising commodity prices.
Building Materials: Ambuja Cements, NBCC, DLF, Orient Cement, and India Cements were the top sells by MFs in this space in June.
The total assets under management (AUM) for the MF industry declined for the second consecutive month to ₹35.6 lakh crore (down 4.2 percent MoM) in Jun’22 – the lowest level since August 2021 – led by a decline in AUM for income, equities, liquid, other ETFs.
Equity AUM for domestic MFs (including ELSS and index funds) also fell 2.9 percent MoM to ₹13.8 lakh crore in Jun’22 due to a decline in equity scheme sales.
