Mutual Fund Update: AUM of Equity MFs grows in April 2018

After falling for two months, asset under management (AUM) of equity mutual funds in India has again gone up in the first month of FY19. Better equity market performance and good inflows have helped equity mutual funds to grow in the month of April 2018. In the month of April, the total market cap of Indian equity market inched up to Rs. 1.53 lakh crore from Rs. 1.42 lakh crore at the end of March 2018. Net inflows in the equity MF was up by 86 per cent on monthly basis and reached to Rs. 12,400 crore. The above two factors have helped equity AUM to grow at 6.7 per cent on a monthly basis to Rs. 8 lakh crore an all-time high. Now, the equity AUM forms 5.2 per cent of the total market cap of Indian equity market.

The increase in net inflows into equity should be seen with a pinch of salt. The reason being lower redemption rather than higher subscription which has led to an increase in AUM numbers. While equity scheme sales were down by 38 per cent on monthly basis to Rs. 26,900 crore, redemptions fell by 61 per cent in the same period to reach Rs. 14,500 crore. Consequently, net inflows increased from Rs 6,700 crore in March to Rs. 12,400 crore in April.

In terms of total weight by sectors in equity mutual fund, we have seen on a monthly basis, the weight of Autos, Consumer, Technology, Metals, Healthcare and NBFCs have increased, while those of PSU Banks, Oil & Gas, Private Banks, Capital Goods and Chemicals declined in the month of April 2018. ITC remained one of the most preferred stocks among MFs in April, with net buying by 11 funds – while its value increased by Rs. 2,450 crore, the stock was up 10 per cent in the month. The company that remained out of favour in the month of April was SBI. Nine funds saw net selling in this fund. The stock was down by 1.5 per cent in the month of April and its value decreased by Rs. 180 crore.