Ahead of the poll season even as the stock market zooms to fresh record high levels, mutual fund managers are loading up on a few sectors including banks, software and consumer non-durables, according to a report.
Ahead of the poll season even as the stock market zooms to fresh record high levels, mutual fund managers are loading up on a few sectors including banks, software and consumer non-durables, according to a report. “Banks, finance, software, consumer non-durables and petroleum products were the top 5 sectors where equity MFs deployed their funds in March-19 and they cumulatively accounted for ~55% share,” Care Ratings said in its report.
As at the end of March-19, HDFC mutual fund held Rs 1.5 lakh crores in equities, with financials accounting for about 33% of stock assets followed by industrial companies at about 14%. ICICI MF held equity assets worth Rs 1.3 lakh crores, with financials making up 27% of assets followed by materials at about 10% and energy at 9.7%, a Bloomberg report noted.
Notably, the overall AUM of Indian mutual fund industry grew 11.4% in FY19 to reach whopping Rs 23.79 lakh crore, registering the lowest growth since FY13. On the fixed income side, deployment of funds by debt mutual funds in FY19 has undergone a shift, in terms of increased allocations to CPs, banks certificate of deposit and PSU bonds/debt, especially after the liquidity crisis.
After the liquidity crisis triggered in the NBFC space, MFs withdrew more than one-third of their investments from CPs. The percentage share of funds deployed by MFs in CPs of NBFCs in March-19 is at 8.13% and amount held is Rs. 1.06 lakh crore, Care Ratings said in its report. “However, on comparing with the previous month, the amount reduced, while the percentage share rose,” the report added.
Interestingly, another interesting trend is that the share of equity in total AUMs is rising and has grown to reach 37.5% in March-19, compared with 35.1% in March-18. As of March-19, AUMs of debt, equity and balanced schemes stood at Rs.11.65 lakh crore, Rs 8.92 lakh crore and Rs 1.8 lakh crore. The private sector mutual funds have continued their dominance over public sector mutual funds with a share of nearly 81% as of March-19. However, the share has reduced from ~82.6% in March-18, said the report.