Investors are pumping more money in mutual funds. According to AMFI data in November, assets managed by mutual funds jumped 38.5 per cent to 22.79 lakh crores, since December 2016. Are you wondering where do mutual funds deploy the money in an overvalued market?
We looked at the data to find out where the giant AMCs invest equity portion of their AUM. Top five AMCs by assets manage 61 per cent of the total industry AUM. We then took out their latest top 10 favourite sectors and tried to find out whether their sectoral preference has changed over the year.
Largest five AMCs as on November 30, 2017 are ICICI Prudential AMC, HDFC AMC, Reliance Nippon Life AMC, Aditya Birla Sun Life AMC and UTI AMC. Their favourite sectors on the basis of their holdings are given in the table below. Top 10 sectors contain 21 per cent assets managed by the biggest five AMCs.
Comparing with last year-end, top five favourite sectors have not changed. However, we noticed some changes while moving down from the sixth to tenth positions.
While power and generation sector has moved up from eighth position to sixth, refineries has moved down by one place to seventh position and NBFC has moved up from ninth position to eighth. Also, housing finance sector replaced automobile-passenger cars sector in the top 10 list.
The top ten sectors have witnessed heavy inflows from biggest mutual fund companies during 2017. Housing finance recorded the highest increase. Its AUM rose 2.5 times since December 2016.
Other sectors among the top 10, which saw AUM doubling in 2017 are power generation & distribution, NBFCs finance, cigarettes & tobacco. Other sectors also witnessed double digit percentage growth in inflows. All the data for research was taken from Ace Mutual Fund database.
