MF Update: Equity AUM at 5.8 per cent of market cap

The equity funds, in general, have generated negative returns year till date thanks to a deluge of tough news that started with re-introduction of long-term capital gain (LTCG) in this year budget.  Even in these circumstances, inflows in the equity fund has remained intact. This is indicated by the contribution of systematic investment plan (SIP) touching an all-time high of Rs. 7,995 crore at the end of October 2018. This has led equity AUM as per cent of domestic market cap up by 90 basis points on yearly basis and 20 basis points on a sequential basis to 5.8 per cent. This is an all-time high number.

It is interesting to note that equity AUM of domestic MFs declined marginally by 0.4 per cent on monthly basis to Rs. 8 lakh crore in October, even as net inflows were the highest since February of 2018. The fall in equity AUM can be attributed to the market correction in October as frontline equity indices were down by 5 per cent in the month.
In terms of sectors, on a month-on-month basis, weights of private banks, public sector banks, utilities, and interestingly NBFCs increased the mutual fund holdings in the month of October. The sector that saw fall in the interest is oil & gas, autos, technology, metals, consumers and cement. 

In terms of stocks, out of top 10 where MFs increased their holdings, six were from the financials. ICICI Bank and SBI were the stocks where MFs have increased their holdings most in terms of values. Others financial companies were Axis Bank, HDFC, Bajaj Finance and Bank of Baroda.  Coal India was one of the most preferred stocks among MFs during last month and 14 funds bought it during the month of October.