Fund Folio : Equity AUM moderates amid volatilities; down 4.7% from peak of Sep`24 By Motilal Oswal Financial Services Ltd
Equity AUM moderates amid volatilities; down 4.7% from peak of Sep’24
Key observations
The Nifty-50 witnessed an additional correction of 0.6% MoM in Jan’25, following a 2% decline in Dec’24. The market closed in red for the fourth consecutive month. Notably, the index was extremely volatile and hovered around 1,440 points before closing 136 points lower. Notably, DII inflows (at USD10b) and FII outflows (at USD8.4b) were at second record highs in Jan’25 (DIIs inflows at USD12.8b and FIIs outflows at USD10.9b in Oct’24).
Equity AUM of domestic MFs (including ELSS and index funds) decreased 3.3% MoM to INR32.3t in Jan’25, led by weak market sentiments (Nifty down 0.6% MoM). Notably, the month experienced a decrease in sales of equity schemes (down 6.3% MoM to INR762b). The pace of redemptions slowed down to INR313b (down 11.6% MoM). Consequently, net inflows moderated marginally in Jan’25 to INR449b from INR459b in Dec’24.
Total AUM of the MF industry inched up 0.5% MoM to INR67.3t in Jan’25, primarily led by a MoM increase in AUM of liquid funds (INR1,181b), income funds (INR202b), and Gold ETFs (INR72b). Conversely, AUM of equity funds decreased INR1,099b MoM. Investors continued to park their money in mutual funds, with inflows and contributions in systematic investment plans (SIPs) at INR264b in Jan’25 (- 0.2% MoM and +40.1% YoY).
Some interesting facts
* The month experienced notable changes in the sector and stock allocation of funds. On a MoM basis, the weights of Private Banks, Technology, Automobiles, Oil & Gas, Consumer, NBFCs, Utilities, Telecom, Metals, Cement, and Insurance increased, while those of Capital Goods, Healthcare, Consumer Durables, PSU Banks, Retail, and Real Estate moderated.
* Private Banks’ weight rose to a seven-month high in Jan’25 to 17.1% (+50bp MoM; +10bp YoY).
* Technology’s weight climbed for the fourth consecutive month in Jan’25 to 9.6% (+20bp MoM; YoY).
* Capital Goods’ weight continued to moderate in Jan’25 to 7.4% (- 40bp MoM; flat YoY).
* Healthcare’s weight, after touching a 48-month high in Dec’24, moderated in Jan’25 to 7.5% (-30bp MoM, +20bp YoY).
* In terms of value increase MoM, divergent interests were visible within sectors: The top 5 stocks that witnessed a maximum rise in value were Maruti Suzuki (+INR63.4b), Bajaj Finance (+INR54.4b), Kotak Mahindra Bank (+INR39.3b), TCS (+INR34.7b), and HUL (+INR34.2b).
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