In the month of June, mutual funds have increased weightage on Auto Sector, Oil & Gas, Consumer, Healthcare, Telecom and PSU Banks, while weightage has been moderate in private banks.
Mutual Funds Investment Strategy: During June 2022, the Nifty recorded a major decline of 4.8 percent on a monthly basis. The market closed on a decline for the third consecutive month in June and it saw the biggest fall since March 2020. Rate hike cycle, inflation, war between Russia and Ukraine, rise in commodity prices, supply chain disturbances put pressure on the market. . FII outflow was seen for the 9th consecutive month in May. Foreign investors pulled out $630 million from the market. This is also the biggest outflow since March 2020. The second DII invested about $600 million in the market. However, mutual fund investors remained confident. The investment in June through Systematic Investment Plan (SIP) stood at 12280 crores. For the 10th consecutive month, more than 10000 crores were invested for SIP. Brokerage house Motilal Oswal has released a report on the investment strategy of mutual funds.
The total AUM of the industry is 37.2 lakh crores
The asset under management (AUM) of the mutual fund industry declined for the second consecutive month in June. In June, it declined by 4.2 per cent on a monthly basis to Rs 35.6 lakh crore. This is the lowest since August 2021. During this period, the AUM declined due to non-launch of NFOs. Due to this, the sales of equity schemes also declined and it declined by 3.4 percent to 38400 crores on a monthly basis. Redemption declined 16.9 per cent on a monthly basis to a 23-month low. The total AUM of the mutual fund industry in May declined by 2.1 per cent to Rs 37.2 lakh crore on a monthly basis.
Equity AUM of Domestic Mutual Fund (along with ELSS and Index Fund) declined by 2.9 per cent to Rs 13.8 lakh crore on a monthly basis. Equity sales declined 7.6 per cent on a monthly basis. Redemption declined by 15.4 per cent on a monthly basis to 25-month low of Rs 12,700 crore. The AUM of Income/Equities/Liquid Fund on Monthly Basis decreased by 71100 crores, 405000 crores and 21900 crores. The AUM of other ETFs declined by 11500 crores.
Mutual fund changed the strategy
In June, mutual funds have changed their strategy. In May where he had increased confidence in capital goods, retail and NBFCs and distanced himself from private banks, cement, consumer durables and automobiles. At the same time, in the month of June, weightage has been increased on Auto Sector, Oil & Gas, Consumer, Healthcare, Telecom and PSU Banks, while weightage has been moderate in Private Banks, Metals, NBFCs, Cement, Retail, Utilities, Textiles, Insurance and Chemicals.
The weightage in auto has increased for the third consecutive month to a 42-month high of 7.6 per cent (+50bp MoM, +110bp YoY). The sector is at number three in terms of mutual fund allocation. Last month it was at number four. The weightage in Oil & Gas is at an 18-month high of 7.3 per cent (+20bp MoM and +40bp YoY).
Whereas, the weightage in the private bank sector has moderated to 17.5 percent (-40bp MoM, +40bp YoY). The weightage in metal is moderate at 26-month low of 1.9 per cent (-30bp MoM).
Increase in value in these shares on a monthly basis
Out of the stocks in which mutual funds have increased their value the most on a monthly basis, 4 are in the auto category. These include Maruti Suzuki, M&M, TVS Motor, Tube Investments, Reliance Inds, Motherson Sumi, Bharti Airtel, Godrej Consumer, Emami, ONGC.
The value of these shares decreased on a monthly basis
At the same time, among the stocks which have lost the most on a monthly basis, 6 are from the banking and financial sector. These include ICICI Bank, HDFC Bank, Kotak Bank, Axis Bank, Tata Steel, Bajaj Finance, L&T, Avenue Supermarts, HCL Tech and HDFC.
