MF update: February 2020, sector & companies in and out of favour

Indian equity market remained volatile in the month of February 2020. After witnessing a sharp fall at the beginning of the month, following Union Budget, it gained steadily till the world was hit by Coronavirus, leading to a sharp fall in the equity prices. This led to the frontline equity index-Nifty losing 6.4 per cent lower on a month-on-month basis in the month of February. Despite such volatility, the mutual fund investors repose their faith in the equity market and invested Rs 31,000 crore in a mutual fund, highest in the last eleven months. Investment through systematic investment plans (SIPs) too remained stable at Rs 8,510 crore in the month.

Sector & companies in favour

On a month-on-month basis, sectors that remained in favour were utilities, retail, consumer, healthcare and telecom. Weight of the above sectors increased in the month of February 2020. The weight of consumer sector companies increased by 20 basis points sequentially to 8.3 per cent in the month of February, a shade below the highest point of 8.4 per cent, it has ever received. This is the second consecutive month when the consumer sectors have increased their share in the equity mutual funds. Another sector that saw a sharp jump in the weight among equity mutual fund is utilities. Its weight has increased to an all-time high of 4.5 per cent, up by 70 basis points on a month-on-month basis. This is the fourth consecutive month when they have increased their share and have hit an all-time high of 2.7 per cent. Power Grid Corp, Avenue Supermarts, Coal India, Bharti Airtel and NTPC were the companies that saw an increase in the value.

Sector & Companies out of favour

Sectors that remained out of favour are capital goods, automobiles, technology, metals, PSU Banks infrastructure and oil & gas. Nevertheless, in terms of value decline on a sequential basis, five of the top 10 stocks were banks and financials including HDFC, HDFC Bank, ICICI Bank, SBI and Axis Bank.