weights of Automobiles, Utilities, Consumer, and Insurance increased: Motilal Oswal Financial Services
Deven Mistry,
Research Analyst,
Motilal Oswal Financial Services
Mumbai, November 15, 2023: Net equity inflows pick up underpinned by lower redemptions.
Key observations
After achieving the milestone of 20k in Sep’23, the Nifty-50 consolidated in Oct’23. The index oscillated 1,012 points before closing 559 points (or 2.8% MoM) lower at 19,080, notably the steepest MoM decline in CY23. The global and local markets were jolted by the Israel-Palestine conflict. FII outflows have been sharp in the last two months; however, they were offset by stronger DII inflows. In Oct’23, DIIs recorded the highest inflows in the last seven months at USD3.4b. FIIs saw outflows for the second consecutive month at USD2.7b. Equity AUM for domestic MFs (including ELSS and index funds) decreased 1.4% MoM to INR20.7t in Oct’23, led by a decline in market indices (Nifty down 2.8% MoM). Notably, the month saw an increase in sales of equity schemes (up 4.3% MoM to INR480b). The pace of redemptions slowed down to INR260b (down 14.8% MoM). Consequently, net inflows accelerated to INR220b in Oct’23 from INR155b in Sep’23. Total AUM for the MF industry rose 0.3% MoM to INR46.7t in Oct’23, led by a MoM increase in AUM for liquid (INR425b), income (INR38b), arbitrage (INR29b), gold ETFs (INR24b), and Gilt (INR23b) funds but offset by a MoM decline in AUM for equities (INR286b), other ETFs (INR79b), and balanced (INR29b) funds. Investors continued to park their money in mutual funds, with inflows/contributions in systematic investment plans (SIPs) reaching a new high of INR169.3b in Oct’23 (up 5.5% MoM and 29.8% YoY).
Some interesting facts
Redemptions dip to a six-month low in Oct’23; Equity AUM up 24.5% in CY23YTD.
Automobiles and Utilities gain; Banks (Private and PSU) moderate. Automobiles’ weight jumped to a 59-month high of 8.4% (+10bp MoM and +70bp YoY) in Oct’23. Utilities’ weight climbed for the second consecutive month to a 38- month high of 3.9% (+10bp MoM, +60bp YoY). Private Banks’ weight moderated for the fourth consecutive month to 18.7% (-20bp MoM, flat YoY) in Oct’23.
AUM: Up 0.3% MoM to INR46.7t; equity inflows accelerate
AUM:
Up 0.3% MoM to INR46.7t; equity inflows accelerate Trend in total AUM
Top 20 funds: Value of equity MFs decreases 1.8% MoM but rises 20.2% YoY
Total equity value for the top 20 AMCs declined 1.8% MoM (+20.2% YoY) in Oct’23 vs. a 2.8% MoM fall (+5.9% YoY) for the Nifty-50.
Sector wise weightage: MoM increase seen in Autos, Consumer, Utilities, and Insurance
Sectoral allocation of funds: Consumer, Oil & Gas, and Private Banks under-owned
The top sectors where MF ownership vis-à-vis the BSE 200 are at least 1% lower: Consumer (20 funds under-owned), Oil & Gas (19 funds underowned), Private Banks (15 funds under-owned), Utilities (14 funds under-owned), and Technology (12 funds under-owned).
The top sectors where MF ownership vis-à-vis the BSE 200 are at least 1% higher: Healthcare (15 funds over-owned), Capital Goods (15 funds overowned), NBFCs (13 funds over-owned), Automobiles (12 funds over-owned), and Chemicals (11 funds over-owned) .
Nifty-50 snapshot: MFs net buyers in 80% of the stocks
The highest MoM net buying in Oct’23 was observed in Bajaj Auto (+11.7%), Adani Ent. (+11.1%), Tech Mahindra (+7.7%), Hindalco (+6.7%), and Hero Moto (+6.7%).
Nifty Midcap-100 snapshot: MFs net buyers in 63% of the stocks
The highest MoM net buying in Oct’23 was seen in L&T Finance Holdings , Vodafone Idea, Syngene Intl, PB Fintech, and Aurobindo Pharma.
Nifty Smallcap-100 snapshot: MFs net buyers in 64% of the stocks
The highest MoM net buying in Oct’23 was witnessed in Laxmi Organic, Mahanagar Gas, BSE, MRPL, and Amber Enterprises.
Top schemes and NAV change: All top 25 schemes close lower MoM
Among the top 25 schemes by AUM, the following reported the highest MoM decrease: Mirae Asset Emerging Bluechip Fund (-3.6% MoM change in NAV), Mirae Asset Tax Saver Fund (-3.4% MoM), Mirae Asset Large Cap Fund (-3.4% MoM), Kotak Flexi Cap Fund (-3.4% MoM), and UTI-Flexi Cap Fund (-3.2% MoM).
Value surprise: Maximum MoM decline seen in financial stocks
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