The Nifty recorded impressive gains of 24 percent YoY despite adverse COVID-related challenges in CY21. Equity AUM for domestic MFs (including ELSS and index funds) reached new highs of Rs 13.9t (+46 percent YoY) in CY21, led by a rise in market indices (Nifty: +24 percent YoY) and an increase in equity scheme sales (up 70 percent YoY to Rs 3,964b), according to the Fund Folio report from Motilal Oswal Financial Services (MOFSL). Consequently, net inflows came in at three-year highs of Rs 1,048b in CY21, up from Rs 64b in CY20 and Rs 768b in CY19.
Equity Aum rises for 8th consecutive year | Motilal Oswal
The MF industry’s total AUM increased 22 percent YoY (Rs 6.7t) to Rs 37.7t in CY21, led by an increase in equity funds (Rs 4,376b), other ETFs (Rs 1,280b), and balanced funds (Rs 1,143b). The total AUM for the MF industry rose (1 percent MoM) to Rs 37.7t in December21, led by a MoM increase in AUM for equities / other ETFs / balanced funds (Rs 607b/Rs 195b/Rs 93b). AUM for income / liquid funds declined Rs 321b/Rs 143b MoM.
Trends in total AUM | Motilal Oswal
Defying the looming challenges, investors continue to invest in MFs, with inflows and contributions in systematic investment plans (SIPs) reaching fresh highs of Rs 113.1b in December ’21 (up 2.7 percent MoM and 34.3 percent YoY).
MF inflows | Motilal Oswal
The year saw a notable change in the sector and stock allocation of funds. The weight of domestic cyclicals increased 160bps to 58.8 percent, led by an increase in the weights of Capital Goods, PSU Banks, Retail, Automobiles, Infrastructure, and Cement.
Motilal Oswal Financial Services’ Fund Folio is a handbook on the holdings of the top-20 domestic mutual funds in India. The monthly report provides details on trend in AUMs and flows, sector allocation by funds, stock-wise holding change, top schemes and NAV change and fund-wise snapshot on top holdings.
Domestic cyclicals attract attention in CY21; Technology sees massive gains
Domestic cyclicals’ weight went up 1.6pp in CY21 led by Capital Goods, PSU Banks, Retail, and Autos. Defensives’ weight was down 0.8pp in CY21, pulled down by Consumer, Healthcare, Utilities, and Telecom. Global cyclicals' weight went down 0.8pp in CY21, dragged down by Oil & Gas.
Top 20 funds: Value of equity MFs up 3.6% MoM and 41.3 % YoY
The total equity value for the top 20 AMCs increased 3.6 percent MoM (+41.3 percent YoY) in December '21 v/s an increase of 2.2 percent MoM (+24.1 percent YoY) in the Nifty.
Among the Top 10 funds, the highest MoM increase was seen in HDFC Mutual Fund (5.1 percent), UTI Mutual Fund (3.9 percent), Kotak Mahindra Mutual Fund (3.9 percent), Mirae Asset Mutual Fund (3.8 percent), and Aditya Birla Sun Life Mutual Fund (3.8 percent).
Sector-wise weightage: MoM increase in Technology, Capital Goods, Healthcare, Metals
In December ’21, MFs showed an interest in Technology, Capital Goods, Healthcare, Metals, Retail, and Textiles, leading to a MoM increase in their weights. Banks-Private, NBFC, Telecom, Oil & Gas, Utilities, Banks-PSU, and Consumer reported MoM decline in their weights. Private Banks (16.5 percent) was the top sector holding for MFs in December ’21, followed by Technology (13.5 percent), NBFCs (7.3 percent), Healthcare (7.2 percent), and Automobiles (6.4 percent). Textiles, Technology, Retail, Metals, Capital Goods, Healthcare, and Chemicals witnessed an increase in value MoM.
Sectoral allocation of funds: Healthcare, Capital Goods, Chemicals, and Autos over-owned
Top sectors where ownership of MFs vis-à-vis the BSE 200 is at least 1 percent higher: Healthcare (15 funds over-owned), Capital Goods (15 funds overowned), Chemicals (15 funds over-owned), Automobiles (14 funds over-owned), and Consumer Durables (13 funds over-owned).
Top sectors where ownership of MFs vis-à-vis the BSE 200 is at least 1% lower: Oil & Gas (20 funds under-owned), Consumer (18 funds underowned), NBFCs (15 funds under-owned), Technology (14 funds under-owned), and Utilities (13 funds under-owned).
Top schemes and NAV change: 24 of Top 25 schemes increase MoM
Among the Top 25 schemes by AUM, the following reported the highest increases: Nippon India Small Cap Fund (+6.5 percent MoM change in NAV), HDFC Small Cap Fund (+5.1 percent MoM), Canara Robeco Emerging Equities (+3.3 percent MoM), Kotak Flexi Cap Fund (+3 percent MoM), and Aditya Birla SL Flexi Cap Fund (+2.7 percent MoM).
Value surprise: Maximum MoM increase in technology
In December ’21, 5 of the top 10 stocks that saw the maximum increase in value were from the Technology space. Infosys, ICICI Bank, TCS, Larsen & Toubro, HCL Technologies, Reliance Industries, Wipro, Sun Pharma, Axis Bank, and Tech Mahindra increased the most in value MoM. Stocks that saw the maximum decrease in value MoM were Bharti Airtel, Kotak Mahindra Bank, RBL Bank, NTPC, FSN E-Commerce, Cholamandalam Investment & Finance, Solar Industries, PB Fintech, IOCL, and Zomato.
Nifty snapshot: MFs net buyers in 70% of stocks
The highest MoM net buying in December ’21 was seen in Wipro (+18.5 percent), Divi’s Lab (+7.2 percent), Tata Motors (+7.1 percent), Grasim Industries (+6.8 percent), and IndusInd Bank (+6.5 percent).