Equity mutual funds witnessed an outflow of Rs 9,253 crore for the seventh consecutive month in January followed by a decline in equity markets during the month. The moderation in domestic MFs is a result of profit booking and portfolio rebalancing amid markets touching new highs, as per analysts.

Live TV

Loading...

The contribution of systematic investment plans (SIPs) also declined 4.7 percent, MoM, in January to Rs 8,020 crore.

Analysts feel that the outflows can be attributed to rebalancing portfolios as markets continue to rally. Going ahead, brokerage firm Sharekhan noted that the pace of outflows has been slowing and is likely to turn positive very soon.

Motilal Oswal further noted that January saw many changes in the sector and the stock allocation of funds.

Among sectors, private banks continued to be the top sector holding for MFs in followed by Technology, NBFCs and Consumer.

The technology sector scaled new heights as its weight increased to 11.9 percent while the oil and gas space reached 29-month lows of 6.9 percent.

As a result, the oil and gas sector slipped into the sixth position in the allocation of mutual funds – it was in the third position in July 2020, it added.

Capital Goods' weight also increased for the third consecutive month to 6.3 percent.

In terms of value increase MoM, 6 of the top-10 stocks were from Financials and Capital Goods. These included Axis Bank, Larsen & Toubro, SBI Cards & Payment, CG Consumer Electrical, SBI and Voltas.

Stocks that exhibited a maximum decline in value MoM were Reliance Industries, Kotak Mahindra Bank, Infosys, HDFC Bank and HDFC.

(Edited by : Abhishek Jha)