Equity AUM touch Rs 20 trillion, Nippon India best performing fund in July

Equity assets under management (including ELSS and index funds) of domestic mutual funds scaled new highs of Rs 20.1 trillion, up 4.4 per cent on a month-on-on month basis in July 2023, fuelled by a rise in market indices (Nifty up 2.9% MoM, shows data analysed by Motilal Oswal Financial Services.

While equity scheme sales remained flat month-on month at Rs 416 billion, redemptions dipped 3.7 percent in the same period to Rs 329 billion.  Consequently, net inflows increased 18.3% to Rs 87 billion in July 2023 from  Rs 73 billion in June 2023.

Total assets under management (AUM) for the mutual fund industry rose 4.5% MoM to Rs 46.4 trillion in July 2023, driven by a MoM increase in AUM for equities (Rs 851 billion), liquid (Rs 642 billion), balanced (Rs 154 billion), and Other ETF (Rs 152 billion) funds.

Top 20 funds: Value of equity MFs increases 4.6% MoM and 25.6% YoY

Total equity value for the top 20 AMCs increased 4.6% MoM (+25.6% YoY) in July 2023 vs a 2.9% MoM rise (+15.1% YoY) for the Nifty. 

Among the Top 10 funds, the highest MoM rise was seen in Nippon India Mutual Fund (+6.5%) followed by ICICI Prudential Mutual Fund (+6.4%), HDFC Mutual Fund (+6.3%), DSP Mutual Fund (+5.1%), and Kotak Mahindra Mutual Fund (+4.7%).

Capital Goods’ weight increased to a 66-month high of 7.3% (+30bp MoM, +140bp YoY) in July 2023 while Healthcare’s weight climbed for the second consecutive month to a one-year high of 6.7% (+20bp MoM, +20bp YoY).

Technology’ weight declined for the second consecutive month to a 37- month low of 9.1% (-20bp MoM, -190bp YoY) in July 2023 while Oil & Gas’ weight continued to moderate for the third consecutive month to a 10-month low of 6.1% (-20bp MoM, -50bp YoY) in the same month. 

 In July mutual funds showed an interest in NBFCs, Capital Goods, Healthcare, Utilities, Metals, PSU Banks, Real Estate, Infrastructure, and Media leading to a MoM rise in their weights. Conversely, Private Banks, Technology, Oil & Gas, Chemicals, Cement, and Retail saw a MoM moderation in weights.

Private Banks (19.8%) was the top sector holding for MFs in Jul’23, followed by Technology (9.1%), Autos (8.2%), Capital Goods (7.3%), and Consumer (6.9%).

 Media, Metals, and Infrastructure were the top sectors to witness a increase in value MoM.

The top sectors where MF ownership vis-à-vis the BSE 200 are at least 1% higher: Capital Goods (16 funds over-owned), Healthcare (15 funds overowned), Automobiles (12 funds over-owned), Chemicals (12 funds over-owned), and NBFCs (9 funds over-owned).
 

The top sectors where MF ownership vis-à-vis the BSE 200 are at least 1% lower: Consumer (19 funds under-owned), Oil & Gas (19 funds underowned), Private Banks (15 funds under-owned), Technology (12 funds under-owned), and Utilities (11 funds under-owned).

Mutual funds were net buyers in 60 per cent of Nifty 50 stocks. According to Motilal Oswal, highest month on month net buying in July 2023 was observed in HDFC Bank (+17.9%), UPL (+17.8%), Adani Enterprises (+12.7%), JSW Steel (+12.7%), and Adani Ports (+8.3%). 

Other most bought stocks in July included HDFC Life insurance, Bajaj Auto, Coal India, HeroMotoCorp, Tata Steel, Tata Consumer, LTIMINDTREE, Power Grid. 

Among Nifty Midcap 100, MFs were net buyers in 62 percent of the stocks. The highest MoM net buying in Jul’23 was seen in Vodafone Idea, Prestige Estates, SAIL, Petronet LNG, and JSW Energy.

In the Nifty small-cap 100 space, MFs were net buyers in 69 per cent of the stocks. The highest buying in July was witnessed in MRPL, Tanla Platforms, Amara Raja Batteries, IIFL Finance, and Route Mobile.

Among the top 25 schemes by AUM, the following reported the highest MoM increase: HDFC Small Cap Fund (+7.3% MoM change in NAV), Nippon India Multi Cap Fund (+6.6% MoM), Nippon India Small Cap Fund (+6.2% MoM), ICICI Pru Value Discovery Fund (+5.8% MoM), SBI Small Cap Fund (+5.8% MoM).

Top schemes by AUM

Divergent interests were seen within sectors. Top 10 stocks that saw the maximum MoM increase in value were ICICI Bank, NTPC, SBI, L&T, Cipla, Federal Bank, Zee Ent, Infosys, Tata Steel, and Sun Pharma.

 Stocks that witnessed the maximum decline in MoM value were Reliance Industries, Axis Bank, Eicher Motors, HCL Tech, Titan Co, Max Healthcare, SBI Life Insurance, Indian Hotels, Avenue Supermarts, and HUL.