The funds took a hit despite finetuning their portfolio by buying technology, telecom, steel, pharmaceuticals, shipping and fast moving consumer goods (FMCG) stocks, and selling automobile, banks, finance, cement, construction, oil exploration and refinery stocks.
Data provided by the Association of Mutual Funds in India (AMFI) shows the corpus of growth funds declined by Rs 8,000 crore, while balanced and ELSS funds weakened by Rs 2,000 crore.
The banking, power, realty and public sector stocks witnessed severe value erosion in May. Realty stocks led the fall, with the BSE realty index declining by 17.6 per cent. The bankex, power and PSU index declined by over 12 per cent each last month.
Relief emerged from the technology space. The BSE tech index rose by nine per cent due to the rupee depreciation. While the mutual funds lent support to metal, healthcare and FMCG stocks, they booked profits in midcap and smallcap stocks.
Mutual funds were heavy buyers in Idea Cellular last month, adding 65 million shares.
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The fund houses increased their holding in Bharti Airtel by 27 million shares, Infosys Technology by 23 million shares and Tata Consultancy (TCS) by 21 million shares. They also bought a sizable 10 million shares each in Tata Chemicals and Ranbaxy Laboratories.
The funds reduced their exposure in private sector banking sector giant ICICI Bank by 19 million shares and public sector giant State Bank of India by 15 million shares. They also lowered their holding in telecom company Reliance Communication by 22 million shares and trimmed their exposure in Larsen & Toubro and BHEL by over 8 million shares each.
DSP Merrill Lynch, Reliance and HSBC executed maximum portfolio churning in May, making fresh additions and total exits from 46, 31 and 24 stocks respectively.
HDFC and Tata Mutual Fund saw the least churning during the month, making fresh additions and total exits in only 4 stocks each.