MUTUAL FUNDS

RETAIL RESEARCH

23 Sep 2016

Monthly Report Sep 2016

Prologue: The month end Assets Under Management (AUM) of Indian Mutual Fund industry witnessed a M-o-M rise during August by 2.97% or Rs. 45,080 crore to Rs. 15,63,177 crore
against Rs. 15,18,097 crore as seen in the previous month (Source: AMFI Monthly data).
The maximum growth among MF categories during the month was seen in the AUM of Balanced Funds category by 7.77%, while the minimum growth was witnessed in the AUM of FoF
overseas category by -4.76%.
The total mutual fund industry saw net inflows of Rs. 25,332 crore while the equity categories saw net inflows of Rs. 6,103 crore during last month.
Net Flow during the month of August 2016 - Category wise
Segment
Income
Infrastructure Debt Fund
Equity
Balanced
Liquid
Gilt
ELSS - Equity
Gold ETFs
Other ETFs
FOF Overseas
Total

AUM as on

Sales on Existing
NFO Sales
Schemes
1,812
75,990

Redemptions /
Repurchases
49,345

20,501
3,878
13,24,461
1,126
812
18
2,085
34
14,28,905

14,398
1,146
13,37,643
1,095
410
69
1,193
86
14,05,385

1,812

Net Inflow /
Outflow
28,457
0
6,103
2,732
-13,182
31
402
-51
892
-52
25,332

Aug 31, 2016

(Crs)
7,04,240
1,795
4,16,814
53,881
2,89,707
16,149
50,604
6,349
21,698
1,940
15,63,177

July 31, 2016

(Crs)
6,69,933
1,782
4,01,469
49,994
3,00,995
15,875
49,064
6,499
20,449
2,037
15,18,097

Changes in AUM
Including flows
(Crs)
34,307
13
15,345
3,887
-11,288
274
1,540
-150
1,249
-97
45,080

Including flows
(%)
5.12
0.73
3.82
7.77
-3.75
1.73
3.14
-2.31
6.11
-4.76
2.97

Excluding flows
(Crs)*
5,850
13
9,242
1,155
1,894
243
1,138
-99
357
-45
19,748

Excluding flows
(%)*
0.87
0.73
2.30
2.31
0.63
1.53
2.32
-1.52
1.75
-2.21
1.30

* Mainly represents approximate MTM gain / loss over the month.

Equity Markets: In the month of August 2016, the S&P BSE Sensex and CNX Nifty gained 1.4% and 1.7% respectively. The BSE Sensex jumped to a 13-month high in line with the
global markets as automakers and consumer companies rose amid speculation payment of past dues to government staff soon will stoke sales of cars and appliances. Gains in
emerging-market stocks, following a rally in US equities to near a record, aided sentiment and put the Sensex on course for its sixth monthly increase. Even the RBIs growth projection
lifted domestic investor sentiments. The Sensex has risen about 28% from the low in February as capital flows accelerated amidst a wave of global policy easing and the forecast of a
good monsoon promised a spurt in rural incomes after a two-year drought.

Debt Markets: The yields of the domestic bonds inched down significantly during the month of Aug 2016. The benchmark, 7.59% GS 2026 bond yield closed at 7.11%, down by 5 bps
over the last month. Some of the factors that influenced the market sentiments negatively during the month included Profit booking, caution ahead of RBIs monetary policy meeting,
ahead of the Jul retail inflation data, weekly auctions, caution ahead of the U.S. Federal Reserve chairs speech at the annual central bankers meeting, favourable comment from the
Federal Reserve chief on hiking rates, etc. Major factors that influenced the market sentiments positively during the month included hopes that the GST Bill would be approved in the
Parliament, approval from Rajya Sabha for GST bill, announcement of Open Market Operation by the RBI, RBIs move to ensure surplus cash in the system, strong response for weekly
auctions, strong demand from foreign investors, g announcement of auction for a new 10-year paper, etc.
Liquidity conditions improved significantly in last 3 months and have been positive during the last 2 months. As against ~Rs 12,297 crs of average liquidity net surplus placed with RBI
during the month of July through various sources (Liquidity Adjustment Facility, export refinance, marginal standing facility and term repos/reverse repos), ~Rs. 28,251 crs of liquidity
was net surplus placed with RBI during the month of August. Wholesale inflation came in at 3.55% (provisional) for the month of July, 2016.

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Categories Month-end Corpus Detailed:

Liquidity Provided by the RBI (Rs. Mn):

The AUM for equity category rose during Aug month by 3.82% MoM to Rs.4,16,814 crore mainly
on the back of notable inflows. In the month of August 2016, the S&P BSE Sensex and CNX Nifty
gained 1.4% and 1.7% respectively. Gains in emerging-market stocks, following a rally in US
equities to near a record, aided sentiment and put the Sensex on course for its sixth monthly
increase. Even the RBIs growth projection lifted domestic investor sentiments. The Equity
category saw net inflows of Rs. 6,103 crore during the month. The category accounts for 27% of
the overall assets of the Indian MF industry.
The AUM of Other ETFs category rose during the month by 6.11% to Rs. 21,698 crore. The
category witnessed net inflows of Rs. 892 crore. It is worth noting that EPFO has started
investing in the stock market through ETFs to invest 5-15% of its incremental corpus. It is
estimated that EPFO will invest a minimum Rs. 400-500 crore every month in the mentioned
ETF. As on June 30, the EPFO invested Rs 7,468 crore (Rs 74.68 billion) in two index-linked ETFs.

Relationship between Net flows in Equity category Vs. Nifty Index:

The AUM of Balanced category rose the most during last month. The category witnessed net
inflows of Rs. 2,732 crore during last month. The recent volatility seen in the domestic equity
markets induced the investors to shift to moderate risk bearing instruments such as Balanced
funds. The AUM of the category rose by 7.77% to Rs. 53,881 crore.
The AUM of the ELSS category witnessed a rise by 3.14% to Rs. 50,604 crore during the month.
The category saw net inflows of Rs. 402 crore during the month.
The AUM of FOF Overseas category fell the most during the month by 4.76% and stood at Rs.
1,940 crore. The category saw net outflows of Rs. 52 crore.
The AUM of Gilt category rose during last month by 1.73% to Rs. 16,149 crore. The category saw
net outflows of Rs. 31 crore during the last month.

Trend in mutual Funds folios (Crs in numbers):

The AUM of liquid funds fell during last month by 3.75%. The category witnessed net outflows of
Rs. 13,182 crore. The AUM of the category stood at Rs. 2,89,707 crore.
The corpus of the Gold ETF category fell during last month by Rs. 150 crore or 2.31% to Rs. 6,349
crore. The category saw net outflows of Rs. 51 crore during the month. Gold Prices fell to its
two-month low as concerns over the possibility of an interest-rate increase drove nervous
investors to close out bets on the precious metal. Gold in INR term fell 0.5% during the last
month.
Funds mobilized by 20 newly launched schemes (All FMPs) in Aug stood at Rs. 1,812 crore.

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Overall MF folios saw an increase for the 27th consecutive month. As of Aug 2016, the total
number of equity folios (Equity + ELSS) stood at 3.72 crore while the overall folios of the MF
industry stood at 4.98 crore. During the month, the overall MF folios saw increase in numbers by
5.6 lakh while the equity folios saw an increase of 3.1 lakh folios.

Average Quarter end AUM:

FII & MF Activity:

On the equity side, Mutual funds were net buyers during Aug by buying net equities of Rs. 2,717
crore. They were the net sellers of Rs. 33.5 crore in July 2016. The net outflows during last
month was a result of gross purchases Rs. 29,723 crore and gross sales Rs. 27,006 crore.
On the debt side, mutual funds were net buyers in Aug by buying debt net of Rs. 4,093 crore.
They were the net buyers in July as they bought the debt securities to the tune of Rs 19,653
crore. The net inflow during the month was a result of gross purchases of Rs. 1,27,545 crore and
gross sales of Rs. 1,23,452 crore.

MFs net investment in Equity and Debt during Aug 2016 (Rs in Crs):

FIIs were net buyers in equity market as they bought securities to the tune of Rs. 9,786 crore in
Aug 2016 after being net buyers of Rs. 11,339 crore in July 2016.
FIIs turned net sellers in the debt side as they sold to the tune of Rs. 2,949 crore during the
month of Aug 2016. The net inflow during the last month was a result of gross purchases Rs.
25,151 crore and gross sales Rs 28,000 crore. They were net buyers in the month of July 2016
bought debt securities for Rs. 6,965 crore.

Bulk Deals:
Company Name
Health.Global
VOLTAMP TRAN
VOLTAMP TRAN
Triveni Turbine
Advance. Enzyme.
Astra Microwave
Atul
Health.Global
Agro Tech Foods.
GHCL
Nava Bharat Vent
PRICOL LTD.

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Date
8/22/2016
9/01/2016
9/01/2016
9/02/2016
8/01/2016
8/01/2016
8/01/2016
8/22/2016
8/23/2016
9/01/2016
9/15/2016
9/09/2016

Exchge
BSE
BSE
BSE
BSE
NSE
NSE
NSE
NSE
NSE
NSE
NSE
NSE

MF
Reliance MF
Reliance MF
ICICI Pru MF
FT MF
Reliance MF
Reliance MF
HDFC MF
Reliance MF
Reliance MF
FT MF
Reliance MF
UTI MF

Price
210.00
775.00
775.00
125.00
1229.43
120.05
1925.00
210.00
525.00
257.40
112.00
120.00

VOLUME
1260104
659200
659537
2096339
200000
700000
400000
1296901
309000
1174893
443420
1269050

DEAL
BUY
BUY
SELL
BUY
BUY
BUY
BUY
BUY
SELL
BUY
BUY
BUY

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RETAIL RESEARCH
Indices & asset class returns (%) across the globe for the month of Aug 2016:

MF Categories returns (%) during the month of Aug 2016:

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Toppers and Laggards for the month based on simple average basis:
Category:
Most of Mutual Fund categories posted positive returns during last month (barring Equity Infotech, Pharma and Gold ETF). On the equity oriented categories side, the Equity
Diversified sub categories such as Large-cap, Mid-cap and Multi-cap categories outperformed the key indices Sensex and Nifty. They posted returns of +2.59%, +2.71% and 3.13%
respectively. In the month of August 2016, the S&P BSE Sensex and CNX Nifty gained 1.4% and 1.7% respectively. Equity Infotech category was the bottom performer during last
month posting -2.50% return. Equity - banking category was the top performer during last month as the category posted 4.19% of returns during last month. Among Debt categories,
Gilt LT Funds outperformed other by posting returns of 1.34%.

Schemes:
Baroda Pioneer PSU Equity Fund (G), Mirae Asset China Advantage (G) and DSP BR Natural Resources & New Energy Fund (G) were the top performing schemes during the month. They
posted 7.3%, 6.8% and 6.3% of absolute returns respectively. Kotak World Gold Fund, DSP BR World Gold Fund and DSP BR World Mining Fund were least performers as they registered
returns of -14.4%, -13.2% and -7.8% respectively.

Top 3 & Bottom 3 performers from MF categories during the month (based on Simple average returns):
The following charts depict the top three (Sky blue) and the bottom three (Orange) performers in each category in Aug 2016.

Large-cap:

Multi-cap:

Mid-cap:

ELSS:

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Equity Infrastructure:

Equity Banking:

Hybrid - Equity:

MIP - LT:

Liquid:

Income:

Short term Income:

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Gilt:

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RETAIL RESEARCH
Asset Weighted average returns (%) (Trailing) for MF categories over periods:
Category Name

1 Month Absolute

3 Months Absolute

6 Months Absolute

1 Year CAGR

3 Years CAGR

5 Years CAGR

Arbitrage Funds

0.65

1.85

3.50

6.38

6.98

Balanced - Debt Oriented

0.82

3.22

7.36

4.02

1.67

0.79

Balanced - Equity Oriented

2.16

9.08

24.47

12.53

22.94

14.60

Equity - Auto

4.05

12.82

32.69

11.12

50.68

30.68

Equity - Banking

4.72

18.69

49.78

24.15

27.63

14.66

Equity - Diversified - Dividend Yield

3.25

10.91

28.71

9.46

20.71

11.50

Equity - Diversified - Infrastructure

2.54

13.45

35.79

10.23

30.61

11.33

Equity - Diversified - LARGE

2.73

11.14

30.51

11.52

16.17

9.67

Equity - Diversified - MID

3.35

13.50

32.79

14.43

28.70

16.63

Equity - Diversified - MNC

0.07

7.05

20.51

4.36

34.93

23.19

Equity - Diversified - MULTI

3.04

12.01

30.50

12.54

21.70

13.87

Equity - Diversified - SMALL

3.25

13.62

37.19

19.98

46.54

24.66

Equity - FMCG

7.38

1.81

11.54

27.80

16.64

19.54

9.63

Equity - Infotech

-2.42

-5.98

5.11

-4.00

13.78

15.26

Equity - Pharma

0.12

7.44

8.82

-4.67

26.49

22.41

Equity - Tax Planning

2.09

10.36

26.14

9.09

24.47

15.40

-1.50

7.86

3.59

17.17

-2.65

2.09

Floating Rate Income Funds

0.73

2.34

4.85

8.69

9.26

9.12

Fund of Funds - FOF - Debt

1.04

4.15

8.63

9.41

10.87

9.24

ETFs - Gold ETFs

Fund of Funds - FOF - Equity

Fund of Funds - FOF - Gold
Gilt Funds - Medium & Long Term
Gilt Funds - Short Term

1.66

6.73

16.57

11.23

7.74

5.14

-0.28

7.48

5.78

14.74

-2.05

0.48

1.23

5.01

8.73

10.41

9.64

7.92

1.29

5.10

9.05

12.53

11.83

9.93

Global Funds

-0.20

7.04

17.57

15.32

8.77

4.86

Income Funds

1.14

4.09

7.56

10.20

9.66

7.87

Liquid Funds

0.44

1.29

2.78

5.53

6.12

6.10

Monthly Income Plans

1.45

6.28

13.22

11.28

14.74

10.98

Short Term Income Funds

0.89

3.05

5.95

9.49

9.40

8.57

Ultra Short Term Funds

0.73

2.34

4.82

8.55

8.62

8.45

Note: NAV value as of Aug 31, 2016.

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Micro Analysis (period between July 2016 and Aug 2016):
New stocks bought in from primary/secondary market by at least three mutual funds during Aug 2016:
Mutual Fund
BNP Paribas Mutual Fund
DHFL Pramerica Mutual Fund
Invesco Mutual Fund
L&T Mutual Fund
HSBC Mutual Fund
Invesco Mutual Fund
LIC Mutual Fund
DSP BlackRock Mutual Fund
JM Financial Mutual Fund
L&T Mutual Fund
Mirae Asset Mutual Fund
IDFC Mutual Fund
Invesco Mutual Fund
JM Financial Mutual Fund
Birla Sun Life Mutual Fund
ICICI Prudential Mutual Fund
IDFC Mutual Fund

Stock

Cadila Healthcare Ltd

Exide Industries Ltd

GAIL (India) Ltd

Godrej Consumer Products Ltd

Housing Development & Infrastructure Ltd

Mutual Fund
HSBC Mutual Fund
Invesco Mutual Fund
Union KBC Mutual Fund
Edelweiss Mutual Fund
IDFC Mutual Fund
Invesco Mutual Fund
Edelweiss Mutual Fund
Invesco Mutual Fund
L&T Mutual Fund
LIC Mutual Fund
Canara Robeco Mutual Fund
Edelweiss Mutual Fund
Invesco Mutual Fund
Canara Robeco Mutual Fund
HDFC Mutual Fund
IDFC Mutual Fund
PRINCIPAL Mutual Fund

Stock

Muthoot Finance Ltd

NHPC Ltd

PTC India Ltd

Tata Chemicals Ltd

TCI Express Ltd

Stocks exited totally by at least three Mutual Funds during Aug 2016:
Mutual Fund
BOI AXA Mutual Fund

Stock
Advanced Enzyme Technologies Ltd

Mutual Fund
Baroda Pioneer Mutual Fund

Edelweiss Mutual Fund

Motilal Oswal Mutual Fund

Kotak Mahindra Mutual Fund

Sundaram Mutual Fund

Escorts Mutual Fund

Ajanta Pharma Ltd

JM Financial Mutual Fund

Reliance Mutual Fund

Bata India Ltd

Tata Mutual Fund

Baroda Pioneer Mutual Fund

Muthoot Finance Ltd

Canara Robeco Mutual Fund

DSP BlackRock Mutual Fund

SBI Mutual Fund

Castrol India Ltd

Baroda Pioneer Mutual Fund

Escorts Mutual Fund

DSP BlackRock Mutual Fund

HDFC Mutual Fund

Escorts Mutual Fund

RETAIL RESEARCH

MphasiS Ltd

Taurus Mutual Fund

Bharat Financial Inclusion Ltd

Canara Robeco Mutual Fund

AXIS Mutual Fund

Birla Sun Life Mutual Fund

Escorts Mutual Fund

UTI Mutual Fund

Baroda Pioneer Mutual Fund

MBL Infrastructures Ltd

L&T Mutual Fund

L&T Mutual Fund

BNP Paribas Mutual Fund

JP Morgan Mutual Fund

Stock
Max India Ltd

Persistent Systems Ltd

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RETAIL RESEARCH
JM Financial Mutual Fund
Escorts Mutual Fund

Birla Sun Life Mutual Fund

Crompton Greaves Consumer Electrical Ltd

LIC Mutual Fund

Escorts Mutual Fund

SBI Mutual Fund

Escorts Mutual Fund

DSP BlackRock Mutual Fund

Gulf Oil Lubricants India Ltd

L&T Mutual Fund

Sundaram Mutual Fund

PRINCIPAL Mutual Fund

HCL Technologies Ltd

Tata Mutual Fund

Canara Robeco Mutual Fund

UTI Mutual Fund

Escorts Mutual Fund

Birla Sun Life Mutual Fund

Indiabulls Mutual Fund

Edelweiss Mutual Fund

Escorts Mutual Fund

BNP Paribas Mutual Fund

LIC Mutual Fund

IDFC Mutual Fund

Torrent Power Ltd

Edelweiss Mutual Fund

Hexaware Technologies Ltd

Escorts Mutual Fund

Edelweiss Mutual Fund

Rural Electrification Corporation Ltd

Invesco Mutual Fund

ICICI Prudential Mutual Fund

Baroda Pioneer Mutual Fund

Power Finance Corporation Ltd

Edelweiss Mutual Fund

Welspun India Ltd

Edelweiss Mutual Fund

Mahindra & Mahindra Financial Services Ltd

L&T Mutual Fund

PRINCIPAL Mutual Fund

JM Financial Mutual Fund

Comments on Fund activities:

Funds have bought some stocks belonging to sectors like Pharma, Power Generation, Finance, Personal care to name a few.
Funds have sold some stocks belonging to Chemicals, Leather, Textiles, Finance, Pharma to name a few.
Among top AMCs having larger AUM, IDFC, Reliance and DSP BR Mutual Funds did the maximum additions and exit of stocks during the month. These funds have made fresh additions
and total exits in 29, 18 & 16 stocks respectively.
Motilal, Mirae and HSBC Mutual Funds did the least churning in terms of making fresh additions and total exits. These funds made fresh additions and total exits from 3, 4 & 4 stocks
respectively during the period.
Most common stock among Top 5 holdings in the portfolio of All 221 Equity Diversified Schemes (in terms of corpus) HDFC Bank, Infosys, ICICI Bank, SBI & ITC Ltd.
Most common stock among Top 10 holdings in the portfolio of All 221 Equity Diversified Schemes (in terms of corpus) In addition to the above, IndusInd Bank, L&T, RIL, Maruti
Suzuki Ind and Yes Bank Ltd.

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NEWS:
Mahendra Kumar Jajoo appointed as Head - Fixed Income of Mirae Asset MF: Mirae Asset Mutual Fund has appointed Mr. Mahendra Kumar Jajoo as Head - Fixed Income & Key
Personnel with effect from August 22, 2016. Mr. Jajoo is ACA, ACS, CFA and has over 25 years of experience in the field of financial services including 11 years of experience in Fixed
Income funds management.
NSE to move to web-based system for MF trade from January 2017: NSE has decided to shift its mutual fund services platform to web-based system from January 2 next year. Currently,
the bourse is operating the mutual fund platform through its fully automated screen trading system - National Exchange for Automated Trading (NEAT).
Merger of Reliance MF and Goldman Sachs MF schemes: Goldman Sachs MF has 12 schemes in operation and are transferred to Reliance MF. Taking forward its deal to acquire
Goldman Sachs mutual fund business in India, Reliance Capital Asset Management has begun the process of merging the schemes of global giant with itself.

Analyst: DhuraivelGunasekaran (dhuraivel.gunasekaran@hdfcsec.com)

Source: NAVIndia.com& ACEMF

RETAIL RESEARCH Tel: (022) 3075 3400 Fax: (022) 2496 5066 Corporate Office
HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022) 2496 5066 Website: www.hdfcsec.com Email:
hdfcsecretailresearch@hdfcsec.com.
Disclaimer: Mutual Funds investments are subject to risk. Past performance is no guarantee for future performance.This document has been prepared by HDFC Securities Limited and is meant for sole use by the recipient and not for circulation. This document is not to be reported or
copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. The information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and i t should not be relied upon as
such. We may have from time to time positions or options on, and buy and sell securities referred to herein. We may from time to time solicit from, or perform investment banking, or other services for, any company mentioned in this document. This report is intended for non-Institutional
Clients.
This report has been prepared by the Retail Research team of HDFC Securities Ltd. The views, opinions, estimates, ratings, target price, entry prices and/or other parameters mentioned in this document may or may not match or may be contrary with those of the other Research teams
(Institutional, PCG) of HDFC Securities Ltd. HDFC Securities Ltd. is a SEBI Registered Research Analyst having registration no. INH000002475.

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