MF industry AUM hits new record high; inching towards INR26t mark - Motilal Oswal
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MF industry AUM hits new record high; inching towards INR26t mark
Key observations
* With positive momentum of the last two months intact, the domestic mutual funds (MF) industry created a new record in May’19 — total AUM hit the INR25.9t (+4.6% MoM) mark, surpassing the previous high of INR25.2t in Aug’18. Notably, the MF industry’s AUM has surged a staggering 3.9x in the past 10 years (INR6.6t in May’09).
* The MoM increase can be primarily attributed to a rise in AUM of income/debt, equity and ETF-oriented schemes.
* Equity AUM (including ELSS and Arbitrage) increased 3.2% MoM to INR8.2t in May, led by a rise in market indices (Nifty up 1.5% MoM). While equity scheme sales were up 21% MoM to INR278b, redemptions increased marginally by 5% MoM to INR180b. Consequently, net inflows were up 69% MoM to INR97b in May.
* In wake of the on-going debt crisis, the MF industry faced immense redemption pressure in May’19, with MFs recording INR20b net outflow in closeended debt-oriented schemes.
Some interesting facts
* The month saw a notable change in sector and stock allocation of funds. Weight of Domestic Cyclicals’ increased 160bp to 10-month high of 62.9%, as weight of Capital Goods, Financials (private & PSUs) and Cement increased while that of Autos moderated.
* Defensives’ weight decreased 110bp to 26.8%. Global Cyclicals’ weight, too, shrank 40bp to 10.4% (refer page 3 for detailed charts).
* Private Banks — the top sector holding of MFs - saw its weightage AUM touched a new high of INR25.9t; up for third successive month increase for the eighth successive month to climb to a new high of 19.7% (+40bp MoM, +330bp YoY).
* In terms of value increase MoM, seven of the top-10 stocks were from Financials in May’19: SBI (+INR43.3b), HDFC Bank (+INR39.9b), ICICI Bank (+INR30.1b), HDFC (+INR27.6b), Axis Bank (+INR22.1b), Kotak Mah. Bank (+INR16.9b) and Bajaj Finance (+INR12.4b).
* L&T saw value increase of INR55b in May’19, as the stock was up 15.6%. Notably, the stock saw net buying by 15 of the top-20 funds.
* In terms of value decrease MoM, three of the top-10 stocks were from Healthcare. ITC (-INR21.7b), Infosys (-INR13.4b), Tata Motors (- INR10.6b), Aurobindo Pharma (-INR10b) and Reliance Inds (-INR9.3b) witnessed the maximum decline in value on an MoM basis
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