MF Update: Defensive sector witnessed decline in their weightage

September 2019 was an exceptional month for the equity market because the frontline equity indices gained more than 8% in just two days. This was post the finance minister announcing the corporate tax rate cut. Nonetheless, most the gain has now been wiped out due to uncertainty in the global markets and concerns about global growth. The equity mutual fund did not remain immune to this and the equity dedicated MF saw a fall of 3% in their sales on monthly basis. What saved the day for equity mutual funds was the amount garnered through systematic investment plan (SIP). It increased by 0.4% month on month and stood at Rs 8263 crore for the month of September 2019.

Favourite sectors of the month

Private sector banks remained the favourite of the month along with Oil & Gas, Capital Goods, Consumer and Retail. Private sector banks saw an increase of 0.6 per cent month on month change in their weightage among equity mutual funds. It stood at 20.8 per cent at the end of September 2019.  Other sectors that saw increase in their weightage among mutual fund are Oil & Gas, Consumer and Capital Goods that saw their weightage increasing by 0.4%, 0.2% and 0.3% respectively.

In terms of company, HDFC Bank, ICICI Bank, Axis Bank, Kotak Bank and Bajaj Finance were the favourites of the MF in the month of September 2019.

Out of favour sectors of the month

Public sector banks remained out of favour among fund houses. In the month of September 2019, their weightage declined by 0.4% and stood at mere 3.6%. Nevertheless, the most notable fall was seen in Technology sector, where MF reduced their weightage by 0.7% leaving it at 8.7%. Healthcare sector too saw fall in their weightage among the mutual fund schemes. This shows that the defensive sector barring consumer, is witnessing a fall in their weightage.

When it comes to companies, Sun Pharma, TCS, Infosys, SBI and NTPC were some companies where MF reduced their weightage in the month of September 2019.