scorecardresearchJune MF sectoral trend: Weightage of auto sector rises for third month to 42-month high

June MF sectoral trend: Weightage of auto sector rises for third month to 42-month high

Updated: 13 Jul 2022, 01:47 PM IST
TL;DR.
As per the report, on a month-on-month (MoM) basis, the weights of Automobiles, Oil & Gas, Consumer, Healthcare, Telecom, and PSU Banks increased, while the weights of Private Banks, Metals, NBFCs, Cement, Retail, Utilities, Textiles, Insurance, and Chemicals moderated.
As per the report, on a month-on-month (MoM) basis, the weights of Automobiles, Oil & Gas, Consumer, Healthcare, Telecom, and PSU Banks increased, while the weights of Private Banks, Metals, NBFCs, Cement, Retail, Utilities, Textiles, Insurance, and Chemicals moderated.

As per the report, on a month-on-month (MoM) basis, the weights of Automobiles, Oil & Gas, Consumer, Healthcare, Telecom, and PSU Banks increased, while the weights of Private Banks, Metals, NBFCs, Cement, Retail, Utilities, Textiles, Insurance, and Chemicals moderated.

The adverse macro backdrop, with heightened worries on rising interest rates, elevated crude oil prices, and liquidity tightening, has kept the market volatile and jittery. However, defying all odds, investors continued to invest in equity mutual funds (MFs) with inflows at 15,498 crore in June 2022 for the 16th straight month. However, this was much lower compared to net inflows of 18,529 crore seen in May.

A report by domestic brokerage house Motilal Oswal noted that the month saw notable changes in the sector and stock allocation of funds.

As per the report, on a month-on-month (MoM) basis, the weights of Automobiles, Oil & Gas, Consumer, Healthcare, Telecom, and PSU Banks increased, while the weights of Private Banks, Metals, NBFCs, Cement, Retail, Utilities, Textiles, Insurance, and Chemicals moderated.

Automobiles’ weight increased for the third consecutive month to a 42-month high of 7.6 percent, informed the report, adding that now the sector ranks third in the allocation of mutual funds. It was on the fourth position in May.

The report added that in terms of value increase MoM, four of the top-10 stocks were from autos - Maruti Suzuki, M&M, TVS Motor, Tube Investments and Motherson Sumi Wiring.

Meanwhile, Oil & Gas sector's weight rose to an 18-month high of 7.3 percent, it further said.

However, the weight of private banks moderated in June to 17.5 percent, down 40 bps MoM, after rising for two consecutive months, added MOSL. However, despite the decline in June, private banks remained the top sector holding for MFs in the month at 17.5 percent, followed by Technology (11.5 percent), Autos (7.6 percent), NBFCs (7.3 percent), and Oil (7.3 percent).

The weight of metals also moderated to a 26-month low of 1.9 percent, down 30 bps MoM, MOSL stated.

Among stocks, the brokerage reported that the highest MoM net buying in June 2022 was seen in Grasim (+14.5 percent), Tech Mahindra (+10.2 percent), Maruti Suzuki (9.2 percent), Titan (+8.8 percent), and Wipro (+7.6 percent).

Stocks that saw a maximum increase in value apart from the top 4 from the auto space are Reliance Industries, Bharti Airtel, Godrej Consumer, Emami, and ONGC. Meanwhile, stocks that witnessed the maximum decline in MoM value were ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank, Tata Steel, Bajaj Finance, L&T, Avenue Supermarts, HCL Technologies, and HDFC.

The report further stated that 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) decreased 2.9 percent MoM to 13.8 lakh crore in Jun’22 due to a decline in equity scheme sales, stated MOSL. At the same time, redemptions dipped 15.4 percent MoM to 12,700 crore – at a 25-month low, it added.

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First Published: 13 Jul 2022, 01:47 PM IST