Even as the stock market remains muted amid the ongoing slowdown, mutual fund managers have made some notable changes in sector and stock allocation. Notably, MF managers have lapped up bluechip stocks including Reliance Industries, HDFC, HDFC Bank, TCS and Avenue Supermarts with these emerging as the top 5 stocks in August 2019, in terms of value increases on month. The fund managers have put in a whopping 62,600 crore in RIL, Rs 18,900 crore in HDFC, Rs 16,600 crore in HDFC Bank, Rs 11,900 crore in TCS and Rs 9,700 crore in Avenue Supermarts, according to a Motilal Oswal report. Interestingly, In terms of value decrease MoM, four of the top 10 stocks were from Financials. "SBI (Rs 60,100 crore), ITC (Rs 15,600 crore), IOCL (Rs 13,900 crore), Tata Steel (Rs 13,700 crore) and NTPC (Rs 12,300 crore) witnessed the maximum decline in value on an MoM basis," the brokerage firm noted.
The mutual fund houses have increased their allocation in Oil & Gas, NBFCs, Tech, Autos, Retail, Healthcare and Consumer sectors, while weights of PSU Banks, Metals, Utilities, Capital Goods, Private Banks, Infrastructure and Media have decreased in the month. "Oil & Gas’ weight increased for the second successive month to 8.0% (+50bp MoM and +120bp YoY), inching closer to its all-time high of 8.1% (Mar’19). The sector is now at the fifth position in sector allocation of MFs – it was at the seventh position 12 months ago," noted the report. Another interesting trend emerging from the sector is the the Auto sector's weight increased 10 basis points on month to 5.5%, after trending down for 15 months.
Equity mutual funds posted a 12.8% on-month rise is inflows to Rs 9,152.43 crore, as compared to Rs 8,112.52 crore in July. Equity mutual funds registered their second highest level of net inflows in the last 10 months. Notably, the SIP inflows have also remained resilient to around Rs 8,200 crore. Retail investors pumped in Rs 8,230.76 crore via SIP in August, marginally lower than Rs 8,324 crore collected last month, data from AMFI revealed. The total industry AUM (asst under management) rose by 3.8% on-month to Rs 25.47 lakh crore as on August 31. Notably, the liquid funds posted a stellar rise as net inflows rose to Rs 79,428 crore in August as against Rs 45,441 crore in July.