Mutual Fund Investment Strategy: The stock market has recovered significantly from the March low. After June, the market has shown a boom in July. Currently, mutual funds have also changed their mood in this changed mood of the market. Apart from defensive stocks, their focus has also increased on largecap companies doing good business. While in May, mutual funds increased focus on the defensive sector and in June on oil and gas, NBFCs and banks (private & PSUs). At the same time, in July, by increasing trust in private banks and oil and gas, there has been increased allocation in the tech, healthcare and consumer sectors. In the top 10 stocks of the choice of fund house, 4 shares belong to Pharma sector.
AUM up 6.4 percent at 27.1 lakh crore
Asset under management of the mutual fund industry has increased 6.4 per cent to Rs 27.1 lakh crore in July. Equity mutual funds have seen a withdrawal of Rs 2,480 crore in July. This is the first time in more than 4 years, when equity mutual funds have been withdrawn. This withdrawal has been observed due to profit booking by mutual fund investors. Earlier, in June, Rs 240.55 crore was invested in equity mutual funds. According to the Association of Mutual Funds in India (AMFI), a total investment of Rs 89,813 crore has been made in mutual funds in the month of July. Earlier in June, there was a total investment of Rs 7,265 crore in mutual funds. Nivea’s contribution through SIP has also reduced in July.
Technology weight was 10.5 percent
In July, the technology sector has increased 180 bps on the Watt Monthly Basis to 1.5 per cent. In the case of mutual fund allocation, this sector has come second.
Private bank weight 22 month low
In July, the VAT on private bank reduced by 90 bps to 16.2 percent on monthly basis. This is the lowest in 22 months. It has reduced by 400 bps on an annual basis.
Weight in oil and gas at new high
Oil and gas have increased weight for the second consecutive month. On this, the weight has increased by 30 bps on monthly basis and 220 bps on yearly basis has been increased to 9.7 percent. This is the new high for the actor. In June, on the basis of oil and gas weight monthly basis, 60 bps had increased to 9.4 percent.
Focus on health sector increased
In July, the focus of mutual funds remains on the health care sector. It can be gauged from this that in the case of increasing value on a monthly basis, 4 of the top 10 stocks are from the pharma sector. These include SunPharma, Dr. Reddy’s, Cipla and Device Lab. Whereas, the most reduced values include HDFC Bank, NTPC, Avenue Supermart, HDFC and L&T.
Top 10 Stocks (Value Change)
Infosys, Reliance Industries, TCS, HCL Tech, PI Industries, Sun Pharma, SBI, Dr. Reddy, Cipla and Device Lab
Bottom 10 stocks (change in value)
HDFC Bank, NTPC, Avenue Supermart, HDFC, L&T, Vodafone Idea, GAIL, Shree Cement, Honeywell Automobile and ITC
Buyers in 40% shares of Nifty 50
In June, the focus of mutual funds has increased on frontline stocks. According to the report, in 40% of the shares of Nifty 50, mutual funds have been buyers in July.
(Report: Brokerage House Motilal Oswal)