Key Trends in Equity Mutual Funds for November 2017

The Indian mutual fund industry continued its dream run and November 2017 remained yet another good month for MFs. Despite the equity market indices giving negative returns, equity asset under management (AUM) of the industry grew by 3.6% on monthly basis to Rs. 7,33,166 crore including equity-linked saving schemes (ELSS). This is the 11^th straight month when equity AUM has increased. The rise was led by an increase in subscriptions of equity schemes (increased by 32% on monthly basis) as there was no mark to market gain, due to a fall in equity market.

Despite such increase in equity AUM, their overall share in MF AUM declined by 90 basis point on monthly basis to 32.2 per cent in November 2017. For all this rise in equity AUM that we have been witnessing in last few years, they account for only 5 per cent of India’s equity market capitalization.

The sector that remained favourite of equity MF in the month of November were Capital Goods, Telecom, NBFCs, Utilities, PSU Banks, Technology, Consumer, Retail and Infrastructure, all these sectors saw a month-on-month (MoM) increase in weight. Sectors that remained out of favour in November were Cement, Metal and Media.

In terms of stock, highest net buying in November on MoM basis was witnessed in Bharti Infratel, up by 44.9 per cent, Bharti Airtel up by 44.5  per cent and Indiabulls Housing Finance up by 37.9  per cent. Stocks that fell out of favour and where MFs reduced their stake were Petronet LNG, Aurobindo Pharma, Hindalco, Adani Ports and Federal Bank.