Equity mutual fund inflows jumped 31 percent to ₹20,534 crore in March driven by a spike in systematic investment plans (SIPs) and a number of new fund offers (NFOs).
Investments via SIPs crossed ₹14,000 crore for the first time ever in the previous month.
A report by ICICI Securities pointed out that the AUM of the mutual fund industry during March 2023 remained largely similar to the previous month at ₹39.4 lakh crore.
In equities, inflows (ex-NFOs) came in at a 10-month high in March at ₹16,693 crore compared to ₹10,638 crore in February, informed ICICI Securities. Meanwhile, the total inflow including NFOs in March was at ₹20,534 crore vs ₹15,700 crore in February. Inflows in the last three months have been higher with an average of around ₹13,000 crore vs ₹5,300 crore in the preceding six months, the brokerage highlighted.
March sectoral and stocks trend
Private Banks remained the top sector holding for MFs with a 19 percent weightage in March 2023, followed by Technology (10.1 percent), Autos (7.7 percent), NBFCs (7.7 percent), and Consumer (7 percent), a separate report by Motilal Oswal informed.
According to the report, Private Banks saw a surge in weight by 160 bps YoY in FY23 meanwhile, the IT sector saw a massive contraction in weight by 290 bps YoY.
Healthcare also slipped to the eighth place from the fourth spot a year ago, with a 60 bps contraction in weight to 6.3 percent, and Metals’ position has also dropped over the last one year, with the weightage declining 70 bps to 1.9 percent, noted the brokerage.
Automobiles, on the other hand, saw a recovery in inflows to fourth spot from sixth a year ago, with the weight increasing 150 bps to 7.7 percent in March, added MOSL.
Media, Capital Goods, Cement, Utilities, and Metals were the sectors witnessing an increase in value on an MoM, stated MOSL.
The report also highlighted that MFs were net buyers in 50 percent of the stocks in the Nifty50 index.
The highest MoM net buying in March 2023 was seen in BPCL (+7.4 percent), Tata Steel (+5.9 percent), Tata Motors (+5.7 percent), Power Grid (+5.6 percent), and Grasim (+5.1 percent).
Meanwhile, Adani Ports (-11.1 percent), Dr Reddy's (-6.7 percent), Britannia Industries (-5 percent), UPL (-4.5 percent) and Titan (-3.6 percent), witnessed the maximum MF selling in March.
The report by ICICI Securities pointed out that Infrastructure and Banking funds outperformed while IT and Pharma funds underperformed in FY23.
Banking funds, after having outperformed significantly, witnessed profit booking in the last few months. Banking funds had significantly outperformed in CY22 with one-year return of 15 percent compared to a 2 percent return delivered by large-cap funds, observed the brokerage.
Value funds also made a comeback in the last financial year, it added.
While the IT sector underperformed significantly in January, it later recovered and outperformed. Infrastructure funds have seen renewed interest in increased government focus on infrastructure spending. Infra funds also benefitted as investors remained cautious on richly valued consumption-oriented sectors and stocks, it noted.
Overall, mid-cap and small-cap funds marginally underperformed in the last few months.