In continuation of an excellent November, December also turned out to be a good month of returns, capping a roller coaster year with wonderful gains for all investors, with Nifty 50 returning 14.9% for CY2020. Overall, different themes played out well in each month, giving impetus to all mutual funds as well as sector/thematic funds, especially IT and Pharma. In recent months, incessant selling by mutual funds due to redemption by investors, comes on the back of good stock market performance over the last 9 months since the lows of March 2020. With Nifty 50 index delivering 3.5% return in October, 11.4% in November and 7.8% return in December, mutual fund investors indulged in continuous profit booking to shore up their substantial gains.
In this newsletter, we bring you an overall scenario, with respect to AUM, ongoing schemes, most preferred stocks by mutual fund managers, stocks bought and sold in the month, money flow, new fund offerings, and many other insights. Before going into AMCs and related info, a quick look at the recent circulars issued by Securities Exchange Board of India (SEBI), with respect to mutual funds.
Since 2018, Securities and Exchange Board of India (SEBI) has introduced many changes – categorization and reorganization of MF schemes, changes in loads and cap on expense ratios, increase in overseas investments, risk-o-meter, introduction of flexi cap category etc – which have proved to be investor friendly and have been useful in streamlining the investment process for passive and active investments.
One important circular was issued by SEBI in December.
- Uniformity in applicability of Net Asset Value (NAV) across various schemes upon realization of funds which was supposed to come into effect from 01 January 2021, has been decided to be implemented from01 February, 2021.
Detailed guidelines mentioning the same are available at: https://www.sebi.gov.in/legal/circulars/dec-2020/circular-on-mutual-funds_48630.html
Regarding the status of operating AMCs and their respective AUMs, the total assets under management increased from Rs.30 lakh crore to Rs.31.4 lakh crore in the month of December.
The assets under management (AUM) of the mutual fund industry stood at Rs.31.4 lakh crore by the end of 31 Dec 2020, a 16.6% increase or Rs.4.46 lakh crore addition to its CY2019 tally. Over the last 4 years, AUM has increased by 33% in 2017, 7.3% in 2018 and 14.27% in 2019. For CY2020, SBI AMC topped the list with an AUM of ~Rs.4.86 lakh crore, an increase of 34.2% over CY2019, followed by HDFC AMC (+10.7%) and ICICI AMC (7.0%). Top 9 AMCs – SBI, HDFC, ICICI, AB Sunlife, Kotak, Nippon Life, Axis, UTI and IDFC- have assets under management of greater than Rs.1 lakh crore each and account for 79.5% of mutual fund industry’s assets.
For CY2020, among large AMCs, Franklin Templeton saw the highest erosion in AUM, falling to Rs.85,506 crore from Rs.1.27 lakh crore in CY2019, mainly due to the abrupt shut down of its six schemes under debt category. Among the smaller AMCs, PPFAS saw the highest increase in AUM, rising from Rs.2,980 crore in CY19 to Rs. 7,639 crore in CY20, a 156% increase.
Of the 42 AMCs, ~ 98% of MF industry total AUM is accounted by 21 AMCs, comprising Rs.13.39 lakh crore of equity assets, Rs.13.73 lakh crore of debt assets, and other assets at Rs.3.66 lakh crore.
As per AMFI data, for the month, net inflow into all MF schemes collectively was Rs.2,968 crore as compared to Rs.27,194 crore in November 2020. A major highlight was the outflow from equity MFs to the tune of Rs.13,121 crore (open & closed ended equity schemes), marking it the 6th consecutive month of net outflows.
Let us examine each of the subcategories relating to the main categories. Overnight and Liquid funds which had an outflow of ~ Rs.24,000 crore in November, saw healthy net inflows of Rs.12,500 crore, followed by corporate bond funds at Rs.8610 crore. Money market and short duration funds closed the month with a net outflow of ~Rs.18,466 crore. All in all, the open-ended income/debt-oriented schemes collectively witnessed a net inflow of Rs.13,863 crore.
Among equity-oriented schemes, with the dramatic upswing in equity markets, investors chose to book profits and shore up the gains of last nine months. Equity funds continue their outflow for the sixth consecutive month, with December outflow at Rs.13,121 crore compared to Rs.13,004 crore last month.
Similar is the situation with hybrid funds, witnessing an outflow of Rs.5,932 crore for the month and Rs. 53,196 crore for CY 2020. Barring dividend yield and sector funds, the net flows were on the negative side.
Other ETFs inflow was buoyant at Rs.6,832 crore in comparison to Rs.641 crore in November, while Gold ETFs were positive at Rs.430.65 crore as compared to an outflow of Rs.141 crore in the previous month.
For the calendar year 2020 as a whole, across open and closed ended schemes, income/debt-oriented funds recorded net flows of Rs.1.66 lakh crore, equity funds a paltry net flow of Rs.2142 crore. Gold and other ETFs saw total inflows of Rs.66,874 crore, marking a good close for CY2020. Net Assets under Management (AUM) ended at Rs.31.4 lakh crore for the mutual fund industry as a whole. SBI AMC stood at pole position with AUM at 4.85 lakh crore, followed by HDFC AMC at 4.11 lakh crore, and ICICI AMC rounding off the third position at Rs.3.91 lakh crore.
Net inflows across all mutual fund categories for CY2020 stood at 1.81 lakh crore.
SIP contribution saw a sudden jump from Rs.7302 crore to Rs.8,418 crore on a month on month basis. SIP contribution for the financial year stands at Rs.71,347 crore, while for the calendar year, it ended at Rs.97,033 crore. This unexpected jump can be attributed to 3 consecutive holidays at the end of November, resulting in SIPs being processed in December. Hence, on a normalized basis, SIP for December can be assumed to be ~Rs.7,900 to Rs.8,000 crore.
Gross new SIP folio additions stood at 14.22 lakh with net addition at 6.46 lakh. Total number of outstanding SIP accounts stand at 3.47 crore and SIP AUM at Rs.3.98 lakh crore.
In terms of details related to mutual fund schemes, given below are top 30 stocks held by all schemes across all AMCs, along with number of shares, holding value at market rate as of 31 December, followed by number of schemes holding it as a percentage of their AUM.
Mutual fund managers continue to churn their portfolios, moving from growth stocks with over stretched valuations to value stocks. A look at the top 30 stocks where MFs increased their exposure in December.
Top 30 stocks where fund managers reduced their exposure during the month are:
Based on changes in fundamentals or news flow of a company, fund managers buy and sell large volume of stocks. After an extensive research, top 30 stocks which were bought or sold in large volumes were collated and are being presented for the benefit of investors.
Similar to the above compilation, large volume of stocks which were sold by all mutual funds collectively in December are:
Owing to markets and regulations, New fund offerings (NFOs) are introduced from time to time, across asset classes by various AMC’s. However, no NFOs were launched in December.
These insights from the data and analysis would surely help investors in understanding mutual fund industry better, and play a pivotal part in direct equity investing too. FYERS Direct team continues its research to bring every investor, the best of information and insights, and help converting them into actionable items supporting their investments. All through the month, FYERS research team will share information that clients can benefit from, at our twitter handle and by the 15th of every month, the newsletter will be made available on our website.
A excel workbook is made available to readers each month, highlighting all the schemes across equity, debt, hybrid, index and ETFs, their NAVs, minimum investment amounts, AUMs, expense ratios, exit loads, risk ratios as well as returns – absolute, annualized and calendar returns.
Hope investors make the best use of the data, analysis and insights at hand, to further their journey of investment building with FYERS Direct Mutual Funds. Wishing you and everyone near and dear, a very happy new year, and the best of season’s greetings.
Stay Safe and Happy Investing!
A data maverick on the loose! 24/7 research, analyzing the stock market upside down and from the inside out. His vast educational accomplishments and 2 decades of in-depth experience from the corporate world helps to join the dots when it comes to investing in stocks. You can expect well-researched themes/portfolios, not stock tips!