Diversifying your investments is the key to thriving in the stock market. Suppose you have invested heavily in a sector, your investments could take a hit if there is a change in government policy or adverse market conditions. But, if you diversify your investments in various sectors, you may suffer a small hit.
This is the same mantra that mutual fund houses follow. They diversify their investments based on macroeconomic data to reduce risk. Fund houses invested Rs 22,563 crore in various sectors in August.
The top five sectors that saw the highest investment from mutual funds in August
Non-essential goods and services fall under the consumer discretionary category. Automakers, luxury fashion brands, hospitality industry, and entertainment industry, etc. fall under the consumer discretionary segment. Consumer spending plays a vital role in the growth of the sector and thrives when there is excess cash in the economy.
Despite the current high inflation, consumer spending has been robust. “Average consumer loan amount increased from Rs 13,500 in 2021 to Rs 15,500 in 2022, indicating higher propensity to buy and improved consumer sentiment during the festive season,” the platform said. Lentra digital loan.
Fund houses invested Rs 6,972 crore in the consumer discretionary sector. Of this amount, 26.1% was in large-cap shares of Rs 1,826 crore, mainly in Maruti Suzuki India Limited and Zomato, at Rs 717 crore and Rs 663 crore, respectively. Fifty-two percent of consumer discretionary investment was directed to mid-cap companies 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% of total consumer discretionary investments, Rolex Rings Ltd. recorded an inflow of Rs 446 crores.
The financial sector provides financial services such as banking, investments, loans and insurance. Institutions such as banks, payment service providers, etc. fall within the financial services sector.
The fund invested Rs 4,860 crore in the financial services sector, of which 33.1% or Rs 1,610 crore went to large cap stocks, mainly in Kotak Mahindra Bank Ltd and Bajaj Finance Ltd, for an amount of Rs 777 crore and Rs 522 crore, respectively. Fund houses invested 48.1% of financial services investment in mid-cap companies at Rs 2,355 crore. AU Small Finance Bank received Rs 777.80 crore, the highest investment in the mid cap segment. The small cap segment received 18.3% of total consumer discretionary investments. India Bulls Housing Finance and IDFC Ltd received a contribution of Rs 150 crore and Rs 144 crore, respectively.
Raw materials refer to the raw materials used for the manufacture of finished products. Gold and silver are also commodities. Agricultural products, construction materials and raw materials used in industries also fall into this category.
Fund houses have invested Rs 2,725 crore in the commodities sector. Of this amount, Rs 1,307 crore, or 47.9% of the total investment in the financial services sector, went to three large cap stocks, primarily Ambuja Cement Ltd at Rs 1,217 crore. Additionally, 31.6% 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% of total investments in the commodities sector. Gujarat Narmada Valley Fertilizers received an influx of Rs 91 crore.
Companies that manufacture medical equipment and pharmaceuticals and provide medical services fall under the healthcare sector. Hospitals, pharmaceutical companies and medical device manufacturers are part of the industry.
A total of Rs 2,455 crore of healthcare shares were purchased in August. Of this amount, the mid-cap segment received Rs 1,379 crore, of which Rs 761 crore was invested in Max Healthcare Institute Ltd. The large cap segment received Rs 924 crore, of which Rs 464 crore was invested in Gland Pharma LTD. The remaining Rs 150 crore was invested in the small cap segment.
Companies that manufacture industrial products and sell machinery, equipment, etc. belong to the industrial sector. Mutual fund companies poured Rs 1,474 into the industrials sector in August, of which Rs 831 crore was invested in the small cap segment. Syrma SGS Technology Ltd pocketed the highest amount at Rs 182 crore. The mid-cap segment received capital of Rs 611 crore, of which Rs 200 crore was invested in Cummins India Ltd, and Rs 30 crore was invested in Siemens Ltd.