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MF June review: Top changes in sector and stock allocations of funds

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By Pranati Deva  Jul 14, 2020 2:40:27 PM IST (Updated)

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MF June review: Top changes in sector and stock allocations of funds
Mutual fund (MF) industry’s total assets under management rose 3.8 percent, MoM, to Rs 25.5 lakh crore in June’20, led by equity funds and income funds, a report by Motilal Oswal (MOSL) said. However, inflows into equity mutual funds separately slumped 95 percent, to Rs 240 crore, its lowest in 4 years, in June as investors pulled out from large-cap and multi-cap funds due to profit booking.

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This is the third consecutive monthly decline in inflow in equity mutual funds, data by the Association of Mutual Funds in India (Amfi) showed.
The month saw notable changes in the sector and stock allocation of funds, MOSL noted. On the Nifty50 index, it said, mutual funds were net buyers for 50 percent of the stocks. Highest net buying in June’20 MoM was witnessed in Kotak Mahindra Bank (+12.3 percent), Bharti Infratel (+11.3 percent), JSW Steel (+9.9 percent) and Britannia (+9.1 percent), it added.
Among sectors, the weights of oil & gas, NBFCs and banks (private & PSU) increased, while that of healthcare, utilities, technology, consumer gooods, capital goods, cement, and chemicals moderated, the report said.
It added that the weight of the oil and gas sector rose 60 bps to its new high of 9.4 percent in June after moderating the previous month. The sector has climbed back to the third position in the allocation of mutual funds, it further said.
Meanwhile, the weight of the NBFC sector in mutual fund allocation rose 60 bps to 8.2 percent after declining for the last 3 months.
Weight of the healthcare sector, which is one of the most sought after plays amid coronavirus pandemic, declined 50 bps in June after rising for 5 consecutive months.
The brokerage also mentioned that private banks (17.1 percent) was the top sector holding for MFs in June’20, followed by consumer goods (9.6 percent), oil & gas (9.4 percent) and technology (8.7 percent). Infrastructure, NBFCs, oil & gas, real estate and PSU banks witnessed a maximum increase in value MoM.
In terms of MoM value increase, 6 of the top-10 stocks were from financials --  HDFC Bank, Kotak Mahindra Bank, Bajaj Finance, ICICI Bank, SBI and SBI Life Insurance, added the report, while stocks exhibiting a maximum decrease in value MoM were Larsen & Toubro, ONGC, NTPC, Coal India, and Cipla.
The report further noted that the contribution of systematic investment plans (SIPs) declined for the third successive month to Rs 7,930 crore (down 2.4 percent MoM). Notably, the contribution of SIPs has slipped below the Rs 8,000 crore mark for the first time since November '18.

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