Deconstructing the change in equity MF portfolio in September

Last month (September 2018) Sensex fell by almost 7 per cent, which remains one of the worst falls in the last two-and-half years. Earlier this year, in the month of February too, we saw a nasty fall in the market after the re-introduction of long-term capital gain tax on equity and equity-dedicated funds, however, the fall was not as bad as we saw during the last month.

The recent fall creates an opportunity for mutual funds. Analysis of the portfolio of the equity the mutual fund schemes shows that MFs were net buyers in the 66 per cent of the Nifty stocks. The company which generated the largest interest and was bought by MFs is Vedanta. It saw a jump of 22.2 per cent in the value of its shares owned by mutual funds on a monthly basis. This was followed by Adani Ports & SEZ, which saw its ownership increasing within the mutual fund by 17.6 per cent in the same period. Asian Paints, HPCL and Coal India were the other companies where MF increased their stake by more than 5 per cent.

The companies where MF reduced their stake most during last month is Wipro (-17.8 per cent), Indiabulls Housing Finance (-12.5 per cent) and Eicher Motors (-10 per cent). In terms of sectors, private sectors remained the top holding among the mutual fund schemes. They formed 16.1 per cent of total AUM. It was followed by technology, which corners 9.5 per cent of AUM. NBFCs, despite losing their favour among MFs, formed 8.5 per cent of AUM.

If we analyse the change in the value of holdings on a sequential basis, Infrastructure sector remained the worst performer losing about 21.7 per cent on monthly basis. It was followed by NFBCs (-17.3 per cent) and public sector banks (-17.2 per cent).