Big Redemptions In Indian Equity Mutual Funds In January

The Indian mutual fund industry witnessed a net inflow in January 2017 of Rs 3,700 crore in equity schemes, much lower than the Rs 9,200 crore net inflow in December 2016, due to a 56 percent month-on-month jump in redemptions. A report by brokerage Motilal Oswal attributes the higher redemptions to investor nervousness ahead of the Union Budget 2017, presented on February 1.

But a 5.5 percent increase in equity assets under management, in January versus December, made for the highest rise in the last 10 months.

Domestic mutual funds accounted for Rs 5,200 crore of inflows into equity markets in January 2017, the sixth consecutive month of inflows.

The report covers the top 20 mutual funds in detail and presents some interesting highlights:

• In January, mutual funds showed interest in oil & gas, NBFCs, metals, utilities, cement, private banks and telecommunications - these sectors saw a month-on-month increase in weight. Technology, healthcare and textiles saw a month-on-month decrease in weight.
• Private banks (16.7 percent) remained the top sector holding in January, followed by autos (10.7 percent), capital goods (8.3 percent) and technology (8 percent).
• After two consecutive months of increase, weight of the technology sector decreased in January. As a result, the technology sector has fallen to the fourth position in sector allocation of mutual funds.
• Of the top-10 stocks, which saw an increase in value on a month-on-month basis, four were private banks. IOC saw a total increase of Rs 1,950 crore in value; 15 of 20 funds bought the stock. Among private banks, HDFC Bank (Rs 2,200 crore), ICICI Bank (Rs 1,900 crore), IndusInd (Rs 1,100 crore) and Yes Bank (Rs 1,000 crore) saw an increase in value on a month-on-month basis.

Total assets under management (AUM) for the industry rose 5.5 percent to Rs 17.4 lakh crore, a new high.