MF Update: CY19 in perspective of Equity Mutual Fund

Indian mutual fund industry has continued to move ahead in CY2019. Their total Asset under Management (AUM) has witnessed sixth straight year of rise. In the year 2019, equity AUM touched a new high of Rs 9 lakh crore, which is six per cent higher than the year 2018. The rise in AUM was led by better performance of the equity market indices such as Nifty, which is up by 12 per cent on yearly basis. Redemptions too declined in the year 2018 and were down by 12 per cent in the same period. Nevertheless, what has restricted the growth in the equity AUM was a fall in the sales of equity schemes. The overall sales of the equity scheme have declined by 14 per cent on yearly basis to Rs 3,07,900 crore for the year 2019.

Sector in focus in the year 2019

In terms of sector, the weight of domestic cyclical increased by 0.3 per cent in the year 2019. This was led by an increase in private sector banks, non-banking financial sector and cement. Sectors where mutual fund reduced their weight are auto, capital goods, chemicals and PSU Banks. Domestic cyclical at the end of December 2019, constitute 62.8 per cent of the total AUM by weight. The weight of defensive has declined by 0.2 per cent led by healthcare and technology in the same period.

Company in focus for the month of December

The company that remained the favourite of mutual funds in the month of December is again from the financial sector. ICICI Bank that passed its turbulent time remained the top pick of mutual funds and Rs 2,900 crore was invested by the MF Schemes in the company. This was followed by another private sector bank, Kotak Mahindra Bank, where mutual funds collectively invested Rs 1,320 crore. Stocks that saw a maximum decline in value on the monthly basis were Reliance Industries, ITC, SBI and BPCL. SBI Life Insurance is another company that saw a partial exit of MF schemes.