Equity asset under management (AUM) of domestic mutual funds (MFs) declined 1.4 percent (MoM)to Rs 6.9 lakh crore in May 2020 owing to bleak market sentiment, stated a recent Motilal Oswal report. It had risen 14.1 percent in the previous month.
The month saw notable changes in the sector and stock allocation of funds, MOSL added. On a monthly basis, the weights of Consumer, Telecom, Automobiles, Healthcare, Cement, Technology, Metals and Utilities increased, while that of Private Banks, NBFCs, PSU Banks, Oil and Gas and Retail moderated, the report stated.
It noted that the telecom sector's weight in mutual fund allocation increased for the seventh successive month to hit an all-time high of 3.9 percent in the month of May. The sector had a weightage of 1.7 percent in the same month last year. The sector's weight was up over 80 bps on a MoM basis while on a year-on-year basis (YoY), it rose over 220 bps.
Meanwhile, private bank’s weight hit the 20-month low to 16.7 percent, down 130 bps MoM and 300 bps YoY.
Among stocks, the maximum increase in value MoM was seen in HUL, Bharti Airtel, ITC, Aurobindo Pharma and Cipla.
While, in terms of value decline MoM, 8 of the top-10 stocks were from financials, the report noted. These included ICICI Bank, SBI, Axis Bank, HDFC Bank, HDFC, Bajaj Finance, Kotak Mahindra Bank and PFC.
Among other notable sectors, the consumer sector’s weight increased 100 bps MoM to 9.8 percent after moderating in the previous month. The sector has climbed back to the second position in the allocation of mutual funds, the report informed.
Defensive space's weight also increased 220 bps MoM to hit an all-time high of 35.5 percent, the report mentioned. In May 2019, the sector's weightage in mutual funds was 27.2 percent.
The report further quoted that contribution of systematic investment plans (SIPs) also declined for the second successive month to Rs 8,120 crore (down 3 percent MoM) after hitting a high of Rs 8,640 crore in March 2020. Notably, the contribution of SIPs is now at the same level that it was 11 months back.
