Investors have proved to be net sellers of equity mutual funds for the first time in seven years due to eight consecutive months of withdrawals in FY 2020-21. During this period, there was a withdrawal of Rs 34700 crore from equity funds including ELSS and index. This data has been prepared by domestic brokerage firm Motilal Oswal. In March 2020, the Nifty fell to a low and after it showed a recovery, the investors booked profit, which resulted in net outflow. However, due to the surge in returns despite withdrawals, the equity AUM (Asset Under Management) of fund houses rose 67 per cent on an annual basis to a record high of Rs 10.2 lakh crore.
According to Motilal Oswal’s report, sales of equity schemes declined in FY 2021 and fell 7 per cent year-on-year to Rs 2.04 lakh crore. Redemptions grew by 64 per cent in FY 2021 compared to FY 2020 and had redemptions of Rs 2.65 lakh crore.
The Actilly AUM reached a record high in FY 2021 after a 27 per cent fall in previous year. It also includes sales figures for March 2020. Overall, the investors continued to invest in the mutual fund industry as net inflows remained positive in the remaining schemes except for balanced and equity.
Veteran investor Rakesh Jhunjhunwala increased his stake in Fortis Healthcare, so far boom in 2021
Changes in the sector allocation of equity funds
There was also a change in the sectoral allocation of equity funds in FY 2021 affected by the Corona epidemic. According to the report, domestic cyclicals increased by 160 basis points to 58 per cent, due to increased allocation in automobiles, NBFCs, cement, real estate, chemicals and infrastructure. During this period, the weight of the defendants decreased by 100 basis points to 32.5 per cent due to decrease in allocation in consumer utilities and telecom. The weightage of global cyclics also decreased by 60 basis points and now it is down to 9.5 per cent.
Technology stocks overtake consumer stocks to reach second
Technology stocks are generally considered to be defensive, but in the last financial year, this was the biggest beneficiary in terms of change in weightage. In the last financial year, it increased by 300 basis points and the weightage reached 11.9 percent. Now the technology sector ranks second in terms of sectoral allocation by mutual funds. 12 months ago it was in third place. Tech stocks have overtaken consumer stocks to take the second position, with a weightage of 7.4 per cent. Commodity cycle is booming in FY 2021, due to which investment in metals has increased.
(Article: Kshitij Bhargava)