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Equity AUM (incl. ELSS and index funds) of domestic MFs increased 5.2% M-o-M to Rs 12.1 lakh crore in July’21.
A flurry of NFOs (new fund offering) saw mutual funds investors pumping in as much as Rs 22,583.52 crore in the month of July 2021 in open-ended equity mutual funds compared to Rs 5,998.17 crore in June 2021. Inflows in July are the highest in the past 17 months. The MF industry’s total AUM increased 4.9% month-on month (M-o-M) to Rs 35.31 lakh crore in July 2021, primarily led by an M-o-M increase in AUM of equity funds (Rs 60,300 crore).
“Equity AUM (incl. ELSS and index funds) of domestic MFs increased 5.2% M-o-M to Rs 12.1 lakh crore in July’21. This was on account of new fund offers (NFOs) launched by mutual fund houses, which led to an increase in equity scheme sales (up 50.8% M-o-M to Rs 44,100 crore) and a rise in market indices (Nifty up 0.3% M-o-M). At the same time, redemptions decreased 3.1% M-o-M to Rs 22,200 crore,” said Deven Mistry of Motilal Oswal.
Sector swap
July saw notable changes in the sector and stock allocation of funds. On an M-o-M basis, the weights of metals, cement, real estate, chemicals, telecom, textiles, and retail increased, while the weights of oil & gas, private banks, automobiles, utilities, consumer, and technology moderated, Mistry added.
Metals achieved a 33-month high after moderating in the last two months to 3.4% (+50 basis points M-o-M; +130 basis points Y-o-Y) while Oil & Gas’ weight hit a 48-month low to 6.4% (-50 basis points M-o-M; -340 basis points Y-o-Y).
Stock play
Mutual funds were net buyers in 68% or 34 Nifty stocks and reduced holding in 32% or 16 stocks in July.
Britannia, HDFC Life Insurance, Adani Ports, Hero MotoCorp and Tech Mahindra were among the top five Nifty stocks that saw net buying by mutual funds. On the other hand, Grasim Industries, Tata Consumer, Wipro, Tata Motors and Kotak Mahindra Bank are top five Nifty stocks in which the mutual fund industry reduced its stake.
“In July, 5 of the top 10 stocks that saw the maximum increase in value were from the BFSI and Metals sectors. ICICI Bank, Tata Steel, Bharti Airtel, L&T, Sun Pharma, SBI, UltraTech Cement, Bajaj Finance, Tech Mahindra, and Hindalco Industries increased the most in terms of value M-o-M,” the report noted.
Reliance Industries, TCS, Kotak Mahindra Bank, Dr Reddy’s Lab, Maruti Suzuki, Axis Bank, Tata Motors, HDFC Bank, HUL, and HPCL witnessed the maximum declines in value M-o-M.
Top schemes
According to an analysis by Motilal Oswal Financial Services of the top-25 schemes by AUM, Nippon India Small Cap Fund (+7.5% M-o-M change in NAV), HDFC Small Cap Fund (+6.9% M-o-M), Axis Midcap Fund (+4.7% M-o-M), Kotak Emerging Equity Fund (+4.1% M-o-M), and UTI-Flexi Cap Fund (+4% M-o-M) stood out.