After declining for two consecutive months, assets under management of equity mutual funds reached a new high of ₹15.2 lakh crore in July 2022, up 10.3 percent from June 2022 as markets rebounded in July after three months of decline. However, the net inflows in equity MFs slowed to ₹15,700 crore in July from ₹22,800 in June as the month witnessed a decline in sales of equity schemes, as well as the pace of redemptions, picked up in the month.
For the overall MF industry as well, the total AUM increased 6 percent to 37.7 lakh crore in July 2022 – primarily led by a rise in AUM for equities, other ETFs, balanced, and income funds. Contributions in systematic investment plans (SIPs) also remained strong at ₹12,140 crore in July 2022 – an eleventh consecutive month of over ₹10,000 crore investment in the category.
Analysing the stock and sectoral trends of the MFs in July, a recent report by domestic brokerage house Motilal Oswal noted that MFs showed an interest in NBFCs, Private Banks, consumers, Retail, and Automobiles in the month under review.
Sectors
According to the brokerage, NBFCs’ weight – after hitting a six-month low in June 2022 to 7.3 percent – saw positive interest among MFs, with an increase in weight to 7.7 percent, up 40 bps MoM in July 2022.
Meanwhile, Private Banks remained the top sectoral pick for MFs in July. Its weight jumped 40 bps to 17.9 percent after moderating in June 2022, noted the brokerage.
The technology sector’s weight, however, moderated to a 17-month low of 10.9 percent in July, down 60 bps whereas, Oil & Gas sector’s weight stood at a five-month low of 6.5 percent, down 80 bps, informed MOSL. The sector now ranks sixth in the allocation of mutual funds – it was in the fifth position a month back, added the brokerage.
Despite the decline in weight, the IT sector remained at the second position in the allocation of MFs. Other sectors that witnessed a decline in weights on an MoM basis included Telecom, Healthcare, and Utilities.
Oil & Gas, and Telecom were the only sectors to witness a reduction in value MoM, highlighted the brokerage.
Stocks
In terms of value increase MoM, six of the top-10 stocks were from the BFSI space, the brokerage informed. These included ICICI Bank, Bajaj Finance, SBI, HDFC Bank, Axis Bank, and Kotak Mahindra Bank.
The other top 4 stocks that witnessed the maximum increase in value MoM were L&T, Infosys, Avenue Supermarts, and HUL.
Meanwhile, stocks that witnessed the maximum decline in MoM value were Oil India, Vedanta, Bharti Airtel, Wipro, Ambuja Cements, Gland Pharma, Reliance Industries, HCL Tech, Dr Reddys Lab, and ONGC, as per MOSL.
