Fisdom Weekly Update (Issue #28): Mutual Funds shift gears (& portfolios) this election season and more…

As the election season closed in and the pre-poll month of March’19 presented a rally – largely driven by foreign inflows, mutual fund managers capitalised on the rally to get rid of some slag and re-align portfolios in light of post-election expectations.

Here’s what the portfolio rejigs for the month of March 2019 looked like:

As evident, the industry seems to be loading up on retail consumer-oriented sectors while majorly selling off bulky wholesale business sectors. The above graph illustrates only the top five sectors bought and sold; however, the total value of stocks bought & sold in Mar’19 was INR 2,350 Cr. & INR 1,645 Cr. – net buying of over INR 700 Cr.

Top stocks purchased by the mutual fund industry included BHEL (electrical equipment), Sheela Foam (furnishing), IDFC First Bank (private banking), Endurance Technologies (2/3-wheeler),Aarti Industries (pharmaceutical chemicals). At the same time, stocks offloaded included Vijaya Bank (public sector bank), Engineers India (consulting services), matrimony (digital services),LIC housing finance (HFC) & PVR (entertainment).

The way ahead?
While last month was dedicated towards re-aligning the portfolio, we expect the election season bring along a strong wave of consumerism as each contesting party carries a populist manifesto, India’s inflation remains within target range & the central bank focuses on credit offtake & liquidity.

What should an investor do?
The time is well-suited for investors to step up their SIP amounts or perhaps start deploying fresh funds in a systematic manner. For the adventurous, investing in funds focused on sectors like private financial institutions, consumption and similar may augur well.

Explore the app or write back to us to know more about the themes & funds that we believe hold solid promise for the time to come.

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If you have any concern, please write to us at ask@fisdom.com or call at 080 48039999, we would be happy to answer your query.

Thanks,
Nirav (Head of Research)
Fisdom