Diversifying your investments is the key to thriving in the stock market. Suppose, you’ve invested heavily in one sector, your investments could take a huge blow if there is a change in government policy or adverse market condition. But, if you diversify your investments across various sectors, you may take a minor hit.
It is the same mantra the mutual fund houses follow. They diversify their investments based on the macro-economic data to lower the risks. The fund houses invested Rs 22,563 crore across various sectors in August.
Top Five Sectors That Saw Highest Investments From Mutual Funds In August
Consumer Discretionary
Non-essential products and services fall under the consumer discretionary category. Auto companies, luxury fashion brands, hotel industry and entertainment industry, etc., fall under the consumer discretionary segment. Consumer spending plays a critical role for the sector’s growth and thrives when there is a surplus cash flow in the economy.
Despite the current high inflation, consumer spending has been robust. ”The average ticket size of consumer loans increased from Rs 13,500 in 2021 to Rs 15,500 in 2022, indicating higher buying propensity and improved consumer sentiment around the festive season,” said the digital lending platform Lentra.
The fund houses invested Rs 6,972 crore into the consumer discretionary sector. Of this, 26.1 per cent was into large-cap stocks, which is Rs 1826 crore, mainly in Maruti Suzuki India Limited and Zomato, at Rs 717 crore and Rs 663 crore, respectively. Fifty-two per cent of the consumer discretionary investment was directed towards mid-cap at Rs 3,633 crore.
Sona BLW Precisions Forgings Ltd received Rs 2,022 crores, the highest investment in the mid-cap segment in August. While the small-cap segment received 21.7 per cent of the total consumer discretionary investment, Rolex Rings Ltd. saw an inflow of Rs 446 crores.
Financial Services
The financial sector provides financial services like banking, investing, lending and insurance. Institutions like banks, payment service providers, etc., come under the financial services sector.
The fund houses invested Rs 4,860 crore in the financial services sector, of which 33.1 per cent or Rs 1,610 crore went to large-cap stocks, majorly in Kotak Mahindra Bank Ltd and Bajaj Finance Ltd, amounting to Rs 777 crore and Rs 522 crore, respectively. The fund houses invested 48.1 per cent of the financial services investment into mid-caps at Rs 2,355 crore. The AU Small Finance Bank received Rs 777.80 crore, the highest investment in the mid-cap segment. The small-cap segment received 18.3 per cent of the total consumer discretionary investment. India Bulls Housing Finance and IDFC Ltd received an inflow of Rs 150 crore and Rs 144 crore, respectively.
Commodities
Commodities refer to raw materials used for manufacturing finished goods. Gold and silver are also commodities. Agricultural products, building materials, and raw materials used in industries also come under this category.
The fund houses invested Rs 2,725 crore into the commodities sector. Of this, Rs 1307 crore, or 47.9 per cent of the total financial services sector investment, went to three large-cap stocks, mainly Ambuja Cement Ltd at Rs 1,217 crore. Also, 31.6 per cent of the investment went to mid-caps at Rs 863 crore. Steel Authority of India received Rs 152 crore, the highest investment in the mid-cap segment. The small-cap segment received 20.2 per cent of the total commodities sector investment. Gujarat Narmada Valley Fertilizers received an inflow of Rs 91 crore.
Healthcare
Businesses that manufacture medical equipment and pharmaceutical products and provide medical services come under the healthcare sector. Hospitals, pharma companies and medical devices manufacturers are part of the industry.
A total of Rs 2,455 crore worth of healthcare shares were bought in August. Of this, mid-cap segment received Rs 1,379 crore, of which Rs 761 crores were invested in Max Healthcare Institute Ltd. The large-cap segment received Rs 924 crore, of which Rs 464 crore were invested in Gland Pharma LTD. The remaining Rs 150 crore were invested in the small-cap segment.
Industries
Businesses that manufacture industrial products and sell machinery, equipment, etc., fall under the industrial sector. Mutual fund houses poured in Rs 1,474 in the industrial sector in August, of which Rs 831 crore were invested in the small-cap segment. Syrma SGS Technology Ltd bagged the highest amount at Rs 182 crore. The mid-cap segment received Rs 611 crore worth of capital, of which Rs 200 crore were invested in Cummins India Ltd, and Rs 30 crore were invested in Siemens Ltd.
