MF tracker: Maximum decline seen in financial stocks in August 2023

The Nifty ended its five-month winning streak in August 2023. After scaling new highs in July 2023, the benchmark saw some profit booking and consolidation in August 23. 

Domestic institutional investors recorded notable inflows of $3 billion in August 2023 after remaining muted for the last four months. FIIs remained net buyers for the sixth consecutive month at $1.7 billion in August 2023; while year-to-date inflows stood at $16.4 billion.

Equity AUM for domestic mutual funds (including ELSS and index funds) increased 1.8 per cent month-on-month to Rs 20.4 trillion in August 2023 despite a weak market sentiment (Nifty down 2.5% MoM). 

 

Total assets under management for the mutual fund industry rose 0.6% MoM to Rs 46.6 trillion in August 2023, driven by a MoM increase in AUM for equities,  income and arbitrage funds. Conversely, AUM for liquid/other ETF funds declined.

On a monthly basis, the weights of Technology, Metals, Consumer Durables, and Chemicals increased, while that of Banks (Private and PSU), Oil and gas, Consumer, and NBFCs moderated.

Here are the key trends according to Motilal Oswal:

1. Technology’s weight, after dipping to a 37-month low of 9.1% in July 2023, climbed in August 2023 to 9.6%
2. Metal’s weight climbed for the third consecutive month to a 15-month high of 2.2%.
3. Private Banks’ weight moderated to 19.2% in August 2023
4. PSU Banks’ weight moderated to a 31-month low of 3% in August 2023
5. In terms of value decline MoM, five of the top-10 stocks were from the financial space: SBI,  ICICI Bank,  HDFC Bank, Kotak Mahindra Bank, and Bajaj Finance

In August, MFs showed an interest in Technology, Metals, Consumer Durables, and Chemicals leading to a MoM rise in their weights. Conversely, Private Banks, PSU Banks, Oil and gas, Consumers, and NBFCs saw a month-on-month moderation in weight. Private Banks (19.2%) was the top sector holding for MFs in August, followed by Technology (9.6%), Autos (8.2%), Capital Goods (7.3%), and  Consumer (6.8%).

 Media, Textiles, Chemicals, and Technology were the top sectors to witness an increase in value MoM.

 

The top sectors where MF ownership vis-à-vis the BSE 200 are at least 1% lower: Consumer (20 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).  The top sectors where MF ownership vis-à-vis the BSE 200 are at least 1% higher: Capital Goods (15 funds over-owned), Healthcare (15 funds over-owned), Chemicals (13 funds over-owned), Automobiles (11 funds over-owned), and NBFCs (10 funds over-owned).


Stocks that saw maximum increase and decrease in value in August 

In August 2023, , the stocks that saw the maximum MoM increase in value were Coforge, Infosys, M&M, Interglobe Aviation, Zomato, Maruti Suzuki, Gland Pharma, Solar Industries, Persistent System, and Cipla.

 

Stocks that witnessed the maximum decline in MoM value were SBI, ICICI Bank, HDFC Bank, Reliance Industries, ITC, Cummins India, TCS, Kotak Mahindra Bank, Bajaj Finance, and Ashok Leyland.

Other highlights:

1. Rs 46.6 trillion - MF industry’s AUM up 0.6% MoM
2. Rs R221 billion- Net equity inflows healthy amid a volatile market
3. Rs 158.1 billion - Amount garnered through SIPs
4. Net equity inflows climb after remaining weak for four months
5. AUM: Up 0.6% MoM to Rs Rs46.6 trillion; equity inflows accelerate
6. Top 20 funds: Value of equity MFs increases 0.9% MoM and 22.1% YoY
7. Top 20 funds: Value of equity exposures in MFs
8. Nifty-50 snapshot: MFs net buyers in 68% of the stocks
9. Nifty Midcap-100 snapshot: MFs net buyers in 51% of the stocks
10. Nifty Smallcap-100 snapshot: MFs net buyers in 67% of the stocks
11. Top schemes and NAV change: 14 of the top 25 schemes close higher MoM

Nifty-50 snapshot: MFs net buyers in 68% of the stocks

The highest month-on-month net buying in August 23 was observed in Britannia (+17%), UPL (+11%), Hero MotoCorp (+9.8%), Grasim Inds (+8.7%), and Wipro (+8.6%).