- The macro backdrop for India turned favourable in July as crude oil prices declined and the Rupee stabilized post the sharp sell-off in June.
- The Good and Service Tax (GST) Council cut GST rates of 88 consumer items, the bulk of which were reduced from 28% to 18% tax rate.
- The Reserve Bank of India (RBI) hiked rates by 25 bps as expected. While the hike was already priced in, markets were surprised that RBI was not hawkish and maintained a neutral stance.
- On the equity market view, July was a good month post a tumultuous May and June. Foreign institutional investor (FII) turned net buyers after being net sellers for the last 3 months while domestic institutional investor (DII) remained net buyers largely led by positive mutual fund flows.
- With regards to the sectoral outlook, we continue to like Consumer Discretionary space with sectors Autos, Small Appliances and White Goods. We also think private sector banks is a secular market share gain hypothesis for the next decade.
Source: ABSLAMC Research
- Aditya Birla Sun Life Equity Fund(An open ended equity scheme investing across large cap, mid cap, small cap stocks):
Recent market correction has provided an opportunity for us to look at quality mid and small caps which have robust earnings outlook. We have started adding pharma companies to our portfolio as we see value emerging in that sector. The fund maintains its cautious stance on the markets and continues to look for value in order to deploy cash.
- Aditya Birla Sun Life Equity Advantage Fund (An open ended equity scheme investing in both large cap and mid cap stocks):
The fund got repositioned (erstwhile Aditya Birla Sun Life Advantage Fund) under new category – Large & Midcap, post recent categorisation exercise. We have added corporate banks Bank as we think majority of the asset recognition pain is already in the price and recovery is in the offing.
- Aditya Birla Sun Life Balanced Advantage Fund (An open ended Dynamic Asset Allocation fund):
Net equity exposure of this fund has decreased to 40% in July 2018 from 44% in June 2018. We have reduced Nifty futures exposure to 5% and the remaining is in stock futures (arbitrage) which would remove the chance of Nifty hedge. Current portfolio, on equity side is more large cap biased and is expected to benefit us, at least in relative sense.
The Scheme(s) may or may not have any present or future positions in these sectors
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.