Equity AUM surges 8.7%: Here is what mutual funds are buying and selling | Personal Finance

Despite the rise in redemptions, net inflows (new money entering the industry) for equity funds increased  16.6% to Rs 456 billion (INR 456b) in June 2024 compared to Rs 392 billion in May 2024, which indicates a positive trend for equity investments.

The total AUM for the entire MF industry rose by 3.8% MoM to Rs 61.2 trillion in June 2024. This growth was driven by increases in AUM for:

• 
  Equity funds 
• 
  Other ETFs (Exchange Traded Funds) – AUM increased by Rs 473 billion  MoM.
• 
  Balanced funds – AUM increased by Rs 280 billion 

After a period of consolidation in May 2024, the Nifty index reached a new all-time high of 24,174 points in June 2024. However, it ended the month slightly lower at 24,011 points, reflecting some volatility. Despite this, it still managed a significant gain of 6.6% compared to the previous month (MoM).

Volatility and Foreign Investment: The market experienced significant swings in June, with the Nifty fluctuating by a total of 2,893 points before settling 1,480 points higher than May’s closing. Notably, Foreign Institutional Investors (FIIs) returned as net buyers in June, investing a net sum of $3.1 billion after remaining net sellers for the previous two months. 

Increased sales of equity schemes: Equity scheme sales jumped by 15% MoM to Rs 905 billion Rise in redemptions: However, it’s important to note that redemptions from equity funds also rose by 13.4%.

In June, MFs decided to invest more in some sectors and companies, while reducing investments in others. 

• 
  Technology: This sector, which includes tech companies, dipped a bit in May but bounced back in June. It’s now the third most invested-in sector by MFs.
• 
  Telecom: MFs put more money into telecom companies in June than they had in 46 months!
• 
  Private Banks, Automobiles, Consumer Durables, Chemicals, and Insurance: These sectors also saw increased investment from MFs.

Sectors getting more money?

Capital Goods: After a big investment push in May, MFs slowed down on this sector in June.

PSU Banks, Utilities, Metals, Healthcare, Consumer Staples, and Real Estate: These sectors saw a decrease in new investments from MFs compared to May.

Top Gaining Companies:

Four out of the top 10 companies that increased in value (worth) in June were private banks. These include HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank.

Basically:

The combined value of stocks held by the top 20 Asset Management Companies (AMCs, which are basically different mutual fund companies) grew by 8% in June compared to May (MoM). This is faster than the overall market growth, as measured by the Nifty 50 index, which went up by 6.6% MoM in June.

The top 20 AMCs also grew much faster than the market. Their value increased by 56.4% over the past year, while the Nifty 50 grew by 25.1%.

Top Performers Among the Top:

• 
  SBI Mutual Fund (grew 8.9% MoM in June)
• 
  Axis Mutual Fund (grew 8.8% MoM in June)
• 
  DSP Mutual Fund (grew 8.6% MoM in June)
• 
  Nippon India Mutual Fund (grew 8.2% MoM in June)
• 
  HDFC Mutual Fund (grew 8.2% MoM in June)

The highest MoM net buying in June 2024 was observed in Dr Reddy’s (+10.3%), Bajaj Finserv (+9.9%), HDFC Life Ins. (+9%), Eicher Motors (+8.8%), Adani Ent. (+8%).

In June 2024, the stocks that saw the maximum MoM increase in value were HDFC Bank, Reliance Industries, Infosys, ICICI Bank, Indus Towers, Axis Bank, M&M, TCS, Kotak Mahindra Bank, and Mphasis.

Stocks that witnessed the maximum MoM decline in value were PFC, L&T, Hindalco Industries, Zee Entertainment, Coal India, HPCL, REC, PNB, SAIL, and Adani Power.

First Published: Jul 15 2024 | 6:00 PM IST