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.
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Thanks,
Nirav (Head of Research)
Fisdom
