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Total AUM of the Mutual Fund industry rose 41% YOY, scaling new highs to reach INR31.4t in FY21. This was primarily led by an increase in AUM of Equity funds (INR4,092b), Income funds (INR2,392b) and other ETFs (INR1,295b), said the Fund Folio report from Motilal Oswal Financial Services.  

Equity AUM (including ELSS and index funds) of domestic MFs reached new highs of INR10.2t (+67% YoY) in FY21, led by a rise in market indices (Nifty +71% YoY). The year saw a decline in sales of equity schemes (down 7% YoY to INR2,306b). The pace of redemptions picked up to INR2,653b  (up 64% YoY), leading to the first ever net outflows in seven years at INR347b in FY21.

The year saw a notable change in the sector and stock allocation of funds. The weightage of domestic Cyclicals increased by 160bp to 58%, led by an increase in the weightage of Automobiles, NBFCs, Cement, Real Estate, Chemicals, and Infrastructure. Technology saw a massive rise in weightage in FY21 to 11.9% (+300bp YoY). The sector is now the second in terms of sectoral allocation by MFs. It was in the third position 12 months ago. Weightage of Defensives decreases 100bp to 32.5%, led by Consumer, Utilities, and Telecom. Global Cyclicals’ weightage, too, fell 60bp to 9.5%.

Motilal Oswal Financial Services’ Fund Folio is a handbook on the holdings of the top-20 domestic mutual funds in India. The monthly report provides details on trend in AUMs and flows, sector allocation by funds, stock-wise holding change, top schemes and NAV change and fund-wise snapshot on top holdings.

Equity value up 1.3% MoM and 64.2% YoY

Total equity value of the top 20 AMCs increased 1.3% MoM (+64.2% YoY) in Mar’21 v/s a rise of 1.1% MoM (+70.9% YoY) in the Nifty. Among the top 10 funds, the highest MoM increase was seen in Kotak Mahindra Mutual Fund (3.9%), Mirae Asset Mutual Fund (3.7%), DSP Mutual Fund (3.2%), Axis Mutual Fund (2.6%), and ICICI Prudential Mutual Fund (2.1%).

Sectoral allocation of funds: Capital Goods, Chemicals, Healthcare, and Cement over-owned

Top sectors where ownership of mutual funds vis-à-vis BSE-200 is at least 1% higher – Capital Goods (16 funds over-owned), Chemicals (16 funds overowned), Healthcare (15 funds over-owned), Cement (nine funds over-owned), and PSU Banks (seven funds over-owned)

Top sectors where ownership of mutual funds vis-à-vis BSE-200 is at least 1% lower – Oil and Gas (20 funds under-owned), NBFCs (18 funds under-owned), Consumer (17 funds under-owned), Technology (15 funds under-owned), and Private Banks (15 funds under-owned)

Nifty-50 snapshot: MFs net buyers in 50% stocks

The highest MoM net buying in Mar’21 was seen in BPCL (+28.6%), SBI Life Insurance (+28.3%), Tata Steel (+9.6%), Bajaj Auto (+8.9%), and UPL (+8%).

Top schemes and NAV change: 44% of top 25 schemes outperform market

Among the top 25 schemes by AUM, Nippon India Small Cap Fund (+3.9% MoM change in NAV), UTI-Flexi Cap Fund (+2.9% MoM), Axis Midcap Fund (+2.2% MoM), Kotak Emerging Equity Fund (+2.1% MoM), and DSP Midcap Fund (+1.6% MoM) reported the highest increase.

Value surprise: Maximum MoM change in Technology

In Mar’21, three of the top five stocks that saw the maximum increase in value were from Technology. Infosys, TCS, BPCL, Tata Steel, HCL Technologies, HUL, ITC, SBI Life Insurance, Tata Communications, and Bank of Baroda increased the most in terms of value MoM. Stocks that saw a maximum decline in value MoM were Reliance Industries, SBI, ICICI Bank, HDFC Bank, Axis Bank, Bharti Airtel, Coal India, HDFC, Vedanta, and Info Edge.

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