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Below is Monthly Equity Outlook - June 2022 by Sorbh Gupta, Fund Manager- Equity, Quantum Mutual Fund

S&P BSE SENSEX declined by -2.16 % on a total return basis in the month of May 2022.

It has underperformed developed market indices like S&P 500 (+0.18%) and Dow Jones Industrial Average Index (+0.32%). S&P BSE SENSEX has also underperformed MSCI Emerging Market Index (0.46%). The broader market has been weaker, S&P BSE Midcap Index has declined by -5.5% for the month & S&P BSE Small cap Index declined by 7.8%. The Power & Metal Sectors which have been hogging the limelight over the past few months were the biggest losers falling by 11.3% and 15.5% respectively. The BSE Auto Index was the only sectoral indices in the green moving up by 4.9%.

Quantum Long Term Equity Value Fund (QLTEVF) saw a decline of -1.1% in its NAV in May 2022. This compares to a -4.15% decline in its Tier I benchmark S&P BSE 500 & -3.78% decline in its Tier II Benchmark S&P BSE 200. Some of our stocks in the Auto & Financial sector showed resilience in an otherwise weak market & contributed to the outperformance. Cash in the scheme stood at approximately 2.3% at the end of the month. The portfolio is attractively valued at 13.6x FY24E consensus earnings vs. the S&P BSE Sensex valuations of 18x FY24E consensus earnings.

FPI outflows remain unabated

Source: NSDL

May-22 has seen FPI outflows of US$ 5.17 bn. This has been the thirst worst month of FPI flows since FPI investments were allowed to invest in India in 1991. Interestingly, of the five ‘worst ever’ months of FPI flows, 4 have come in this calendar year. Domestic institutional investors (Mutual Funds & Insurance put together) have been net buyers for May 2022 to the tune of US$ 6.57 bn.

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