Auto industry weightage in mutual fund schemes hits 3.5-year high in June

The industry weight increased by 50 basis points (bps) sequentially and 110 bps year-on-year. The sector is now ranked third in mutual fund allocation – up from fourth a month ago.

According to the report, in terms of price increases sequentially, four of the top 10 stocks were from the auto industry; Maruti Suzuki, Mahindra & Mahindra, TVS Motor and Motherson Sumi Wiring.

Moreover, the weightage of the oil and gas sector was at an 18-month high of 7.3%, 20 bps MoM and 40 bps YoY, while the weightage of private banks – down from 40 bps MoM – rose to 17.5% in June. two consecutive months.

Metal stock weighting fell 30 bps MOM to 26-month low of 1.9%.

The report said that out of 50 Nifty stocks, 70% or 35 of the mutual schemes were net.

The month saw notable changes in the sector and the fund’s stock allocation. On a sequential basis, automobile, oil & gas, consumer, healthcare, telecom and PSU banks rose, while private banks, metals, NBFCs, cement, retail, utilities, textiles, insurance and chemicals eased.

Nifty fell 4.8% in June after falling 3% in May. The market closed in the red for the third consecutive month and recorded the sharpest monthly decline since March 2020.

Foreign institutional investors (FIIs) recorded outflows for the ninth consecutive month in June with $6.3 billion inflows – the highest since March 2020.

However, domestic inflows remained strong at $6 billion in June, according to the report. Inflows during the current calendar year stood at $27.4 billion.

“With the unfavorable macro background, rising concerns over rising interest rates, high crude oil prices and liquidity crunch, the market remains volatile and nervous. However, defying all odds, investors continued to invest in mutual funds and investments and contributions in systematic investment schemes (SIPs) remained strong. 12,280 crores in June – tenth consecutive month 10,000 crore in SIPs,” Motilal Oswal Financial Services said in the report.

Moreover, the total assets under management (AUM) of the mutual fund industry declined for the second consecutive month. 35.6 trillion (-4.2% MoM) in June, the lowest level since August 2021, due to a fall in AUM for income ( 71,100 crore), Equity ( 40,500 crore), Liquid ( 21,900 crore), other ETFs ( 11,500 crore).

Equity AUM for domestic MFs, including ELSS and index funds, reduced by 2.9% MoM 13.8 trillion in June.

“This was due to decline in equity scheme sales (from 7.6% MoM) 35,500 crore),” the report said.

At the same time, redemptions fell by 15.4% MoM 12,700 crore, a 25-month low. As a result, there was a marginal decline in net inflows. 22,800 crore in June, from 23,400 crore in May.

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