Private Sector Bank Remain Top Sector Holding For Mutual Funds

Private Banks (17.7%) were the top sector holding for mutual funds in Oct'21, followed by Technology (11.7%), NBFCs (8%), and Healthcare (6.9%), a report by Motilal Oswal shows.

"In Oct'21, MFs showed an interest in Banks (Private and PSU), Automobiles, Capital Goods, Cement, and Retail, leading to a MoM increase in their weightage. Healthcare, Consumer, Utilities, Oil and Gas, Technology, Chemicals, Infrastructure, and Consumer Durables reported a MoM decline in their weightage," the Fund Folio report by Motilal Oswal showed.

Equity inflows witness a slowdown; Banks and Automobiles hog the limelight

According to the Fund Folio report, the Nifty continued to clock fresh highs (18,604) in Oct'21. The index oscillated 1,150 points before closing 54 points (or 0.3%) higher MoM at 17,672.

"The index is up 30% in CY21 year to date. The increase in volatility was on the back of weak global cues, stretched valuations, and FIIs turning net sellers. FII outflows stood at USD2.3b after two consecutive months of inflows. DIIs saw inflows for the eighth consecutive month at USD0.6b. However, investors have capitalized on the rally to book profit and rebalance their portfolio as the market continues to clock record highs, leading to moderation in domestic mutual fund (MF) flows. Investors continued to invest in MFs, with inflows and contributions in systematic investment plans (SIPs) touching fresh highs of INR105.2b in Oct'21 (up 1.6% MoM and 34.9% YoY)," the report stated.

Equity AUM (including ELSS and index funds) of domestic MFs increased by 1.5% MoM to Rs 13.5t in Oct'21. This was on account of a marginal rise in market indices (Nifty up 0.3% MoM) and decrease in redemptions (down 21.7% MoM to INR245b). Equity scheme sales decreased by 19% MoM to Rs 331b. This led to a moderation in net inflows to INR86b in Oct'21 (v/s INR96b in Sep'21), marking the eighth consecutive month of inflows.

Total MF industry AUM rose (1.6% MoM) to INR37.3t in Oct'21, led by a MoM increase in the AUM of equity/income/balanced funds (INR205b/INR200b/INR144b). The AUM for liquid/arbitrage funds declined by INR52b/INR20b MoM.