Mutual Fund Stock Strategy: The stock market is making new records every day this year. This boom in the market has continued since the beginning of this year. Meanwhile, mutual funds have also changed their strategy by looking at the high valuation of the market. Talking about January 2021, the focus of mutual funds has increased on sectors like capital goods and auto. Among the stocks where mutual funds have invested the most, capital goods, auto and financial stocks are the priority. At the same time, some heavyweights including RIL have reduced investment. Let us know that in January, mutual funds have withdrawn about Rs 9,253 crore from equity. This has been the 7th consecutive month when money has been withdrawn from equity.
Which sector increased focus, which decreased
Among the sectors that have focused on a monthly basis in January 2021, capital goods, automobile, technology, telecom, PSU bank and cement sector are at the top. Weightage has increased in them. At the same time, the sectors on which the focus has narrowed, among them are Oil and Gas, Healthcare, Utilities, NBFCs, Consumer and Retail sectors. The weightage has decreased slightly in them.
Top 10 shares in which increased stake
Axis Bank, Bharti Airtel, Lorsen and Tourbo, TCS, Tata Motors, SBI Card and Payment, CG Consumer Elect, SBI, Voltas and Bajaj Auto
Top 10 shares, reduced stake
RIL, Kotak Mahindra Bank, Infosys, HDFC Bank, HDFC, Device Labs, Bajaj Finance, NTPC, PowerGrid Corporation, Maruti Suzuki
Capital goods weightage at 10-month high
In January 2021, the weightage on the capital goods sector increased for the third consecutive month to 6.3 per cent on a 10-month high. It has increased by 50bp on a monthly basis. However, on an annual basis it is still less than 90bp. The weightage on the technology sector has increased by 20bp on a monthly basis and 380bp on an annual basis to 11.9 per cent.
The weightage on the oil and gas sector has come down to a 29-month low of 6.9 per cent. There has been a reduction of 50bp on a monthly basis and 40bp on an annual basis. It has slipped to number six in the Mutual Fund allocation. While it was third in July 2020.
7th consecutive month money withdrawn from equity
In January, for the 7th consecutive month, mutual funds have withdrawn money from the stock market. In January, Equity Mutual Fund pulled out Rs 9,253 crore from equity. Net outflow in January was Rs 35,586 crore. In January, mutual funds were also cautious in debt segment and during this time they have withdrawn Rs 33409 crore. At the same time, the contribution of SIPs has also been reduced by 4.7 per cent on monthly basis and 6 per cent on an annual basis to Rs 8020 crore. Asset under the management of the mutual fund industry declined by 1.7 per cent to Rs 30.5 lakh crore on monthly basis from the end of January to 31.02 lakh crore in December 2020.