Mutual Funds Mop-Up Technology, Healthcare And Energy Stocks

In the month of July mutual funds have increased their weight by adding Technology, Healthcare, Oil & Gas and Chemicals stocks, while that of Private Banks, Consumer, Utilities, Capital Goods, Telecom, Retail, Automobiles and NBFCs moderated.

According to a Motilal Oswal report technology weight increased 180 basis points MoM (month-on-month) to 10.5% . Private Bank's weight on the other hand hit 22-month low to 16.2%.

"Oil and Gas' weight increased for the second consecutive month and climbed to a new high of 9.7% (+30bp MoM, +220bp YoY). In terms of MoM value increase, 4 of the top-10 stocks were from Healthcare: Sun Pharma (Rs. 16.6 billion), Dr. Reddy's Labs (+ Rs. 13.2billion), Cipla (+Rs. 12.4billion) and Divis Labs (+Rs. 11.7billion)," Motilal Oswal said.

According to the release the stocks exhibiting maximum decrease in value MoM were HDFC Bank (-Rs. 22.5billion), NTPC (-Rs. 19.1billion), Avenue Supermarts (-Rs. 12.7billion), HDFC (-Rs-5.3billion) and L&T (-Rs.5.3billion).

Meanwhile, the Indian Mutual Fund Tracker-July 2020 by Motilal Oswal Institutional Equities reveals that after plunging 18% from Rs. 27.2 trillion in Feb'20 to Rs. 22.3trillion in Mar'20; total AUM of domestic MFs have climbed back to Rs. 27.1 trillion in Jul'20. This was primarily led by equity, liquid, income, and other ETF funds.

Equity AUM (including ELSS and Index funds) of domestic mutual funds increased 5% MoM to Rs7.8trillion in Jul'20. This was led by a rise in market indices (Nifty +7.5% MoM) and a marginal increase in sales of equity schemes (up 1.8% MoM to Rs. 148billion). At the same time, redemptions increased 32.5% MoM to Rs. 188 billion, leading to net outflows to Rs 40 billion in Jul'20 - the first in 52 months.