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Large cap, mid-cap and small caps that MFs traded in November 2022

  • India Infoline News Service
  • 15 Dec , 2022
  • 9:27 AM
In the current year, November 2022 was the second best month in terms of FPI flows after August 2022. However, it is not just the FPIs that are driving the Indian markets, but even domestic mutual funds have acquired enough heft to impact and move markets.

Indian equity mutual funds saw small inflows in November 2022 with NFOs and SIP contributing their might to the flows into equity funds. If NFOs infused Rs7,191 crore in November, SIP flows were to the tune of Rs13,306 crore, the best such level till date. Among NFOs, the FTPs on the debt side attracted interest, while equity fund action was restricted to sector funds and index funds. But the bigger question is, what have the mutual funds been doing with all these flows?

One way to answer this question is to get a macro picture of where the flows are directed. We look at the mutual funds overall and conduct a reality check on the major stocks that were bought and sold by the mutual funds. Remember, mutual funds manage more than Rs40 trillion today and that is a lot of money to play around with. Here we do not look at specific AMCs but on the overall picture of what mutual funds did during the month. To avoid the risk of comparing apples and oranges, we have separately covered the large cap, mid-cap and small cap preferences of mutual funds for the month of November 2022.

How Mutual Funds churned large cap stocks in November 2022?

How do we define large caps here? For the sake of simplicity, we stick to the AMFI definition based on market cap rankings. Under the AMFI methodology, the universe of listed stocks on NSE and BSE are ranked descending based on their market cap. Out of this list, the top-100 stocks by market capitalization are classified as large cap stocks. This list is monitored and reviewed by AMFI every 6 months to ensure definitions are current. Here are the major large cap stocks that mutual funds bought and sold in November 2022.

We begin with the large cap buying by the mutual funds in November 2022. Overall, the mutual funds added 698 lakh shares of Tata Steel Ltd, 554 lakh shares of Zomato Ltd, 314 lakh shares of FSN E-Commerce Ventures (Nykaa), 272 lakh shares of GAIL India, 127 lakh shares of Bandhan Bank, 80 lakh shares of Vedanta Ltd and 66 lakh shares of ICICI Prudential Life Insurance. Apart from the above mentioned stocks, mutual funds also added smaller quantities of Paytm, Apollo Hospitals and Indus Towers in November 2022. The bias seems to be clearly towards picking up under-priced digital stocks at discounts to IPO price.

We now turn to major large cap selling by mutual funds in the month of November 2022. The selling was quite prominent in select stocks that had shown a tendence to rally sharply in the recent past. A total of 354 lakh shares of Bank of Baroda were sold, apart from 149 lakh shares of HCL Technologies Ltd and 142 lakh shares of Hindalco Ltd. During the month of November 2022, other major stocks sold included 130 lakh shares of HDFC Life Insurance, 84 lakh shares of UPL Ltd, 63 lakh shares of Dabur India, 23 lakh shares of Berger Paints and 17 lakh shares of Adani Enterprises. In addition, mutual funds sold smaller quantities of Dr Reddy’s Laboratories and Piramal Enterprises Ltd.

How mutual funds churned mid-cap stocks in November 2022?

Let us now turn to the methodology used to classify a stock as mid-cap? Here also, we stick to the standard AMFI definition. Once the top 100 stocks by market cap are classified as large cap stocks (as explained previously), the 101st to 250th ranked stocks by market cap are classified as mid-cap stocks. Here is a quick glance at the mid-cap stocks that mutual funds bought and sold in the month of November 2022.

Let us first focus on the mid-cap buying in the month of November 2022. Overall, mutual funds added 597 lakh shares of Union Bank, 292 lakh shares of Steel Authority of India (SAIL), 232 lakh shares Delhivery Ltd, 132 lakh shares of NMDC Ltd, 131 lakh shares of Bank of India and 109 lakh shares of listed digital market place, PB Fintech (Paisabazaar). Mutual Funds also added 164 lakh shares of GMR Infrastructure, 56 lakh shares of Shriram Finance, 50 lakh shares of Biocon Ltd and 48 lakh shares of Aditya Birla Capital Ltd. The mid-cap buying was predominantly focused on alpha seeking, buying stocks with favourable price traction and offering a value proposition with momentum.

We now turn to the major mid-cap selling. In November 2022. Mutual Funds sold 453 lakh shares of IRCTC, 308 lakh shares of Indian Hotels, 287 lakh shares of Bharat Heavy Electricals Ltd (BHEL) and 217 lakh shares of Vodafone Idea Ltd among the heavy sell candidates. Mutual funds also sold 40 lakh shares of Aurobindo Pharma, 31 lakh shares of Tube Investments Ltd and 23 lakh shares of ABB India Ltd. In addition, the mutual funds were marginal sellers in Patanjali Foods, Godrej Industries and L&T Technology Services (LTTS).

How mutual funds churned small cap stocks in November 2022?

Finally we turn to the small cap stocks category. On market cap ranking, the stocks ranked 251st and lower are classified as small caps as per AMFI definition. We continue to use that definition for our rankings also. Here is a quick snapshot of some of the key small cap stocks where mutual funds were active in November 2022. Typically, small caps and mid-caps tend to outperform the large caps when the undertone of the market is bullish.

In November 2022, mutual funds added 37 lakh fresh shares of Jindal Stainless, 36 lakh shares of Orient Paper & Industries, 31 lakh shares of PCHL ( formerly Phillips Carbon Black Ltd) and 24 lakh shares of Strides Pharma Science Ltd. In addition, small cap stocks purchased included 17 lakh shares of Intellect Design Arena (formerly Polaris), 14 lakh shares of Pricol Ltd and 12 lakh shares of Mayur Uniquoters Ltd. Mutual funds also added smaller quantities of IIFL Finance, Amara Raja Batteries and TCPL Packaging during the month of November 2022.

Finally, let us look at small-cap selling in November 2022. Mutual funds sold 34 lakh shares of Easy Trip Planners, 27 lakh shares of Fino Payments Bank, 17 lakh shares of Rain Industries and 15 lakh shares of Railtel Corporation Ltd. In addition, mutual funds also sold smaller quantities of select small cap stocks including HEG Ltd, IIFL Wealth Management, JK Paper, Cochin Shipyard, Mazagon Dock Shipbuilders and Indigo Paints Ltd.

What is the gist of the story that emerges from the November 2022 mutual fund churn data? In the large caps, there is a shift into new age digital stocks and metals while selling out of sterling performers in the recent past. There is still a lot of alpha hunting visible in the mid-caps and the small caps and it is entirely stock specific. Amidst the volatility, Mutual funds have made the best of the conditions.

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India's best performing mutual funds for October 2022

  • India Infoline News Service
  • 01 Nov , 2022
  • 9:36 AM
The month of October 2022 was a genuine bounce as the markets factored in broader stories like the outsourcing potential of India and the effective inflation being much lower due to the free food effect. After the Nifty fell -2.56% in September, the month of October 2022 saw Nifty gain a full 5.37% as it rallied nearly 1,000 points in the month. The markets chose to ignore the high frequency pressures of inflation and interest rates and focus on the long term potential of the India story. A revival in IPOs also helped markets. The buying was across the board as even the Mid-Cap index gained 2.49% while the Small Cap Index gained 2.59% in October 2022. FPI flows were neutral, but what mattered to the markets was that FPIs got interested in IPOs once again while domestic investors stood their ground.

The short term returns across all the equity and even debt mutual funds were positively impacted, although the positive impact was more visible in the equity fund categories. The positive impact was a lot more pronounced in the high beta funds. Bond yields remained flat to positive and did not move much as markets await signals on the peak RBI repo rates. The RBI MPC meet on 03rd November could offer important cues. The month of October 2022 was a welcome bullish shift from the volatility of September 2022 . Here is a quick look at the top mutual fund performers across categories.

1.      Equity Large-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
Canara Robeco Blue-Chip (G) 1.655% 18.583% 15.357%
Axis Blue-Chip Fund (G) -4.614% 13.543% 14.090%
Edelweiss Large Cap Fund (G) 3.580% 16.551% 13.242%
Category Average 1.393% 14.993% 11.194%
BSE 100 (TR) Index 4.174% 16.844% 12.763%
Data Source: Morningstar

2.      Equity Multi-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
Quant Active Fund (G) 12.422% 33.902% 22.740%
Mahindra Manulife Multi (G) 3.044% 24.788% 16.367%
Nippon India Multi Cap (G) 16.341% 20.978% 13.688%
Category Average 4.458% 20.552% 13.772%
BSE 500 (TR) Index 3.914% 18.402% 12.564%
Data Source: Morningstar

3.      Equity Mid-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
Quant Mid-Cap Fund (G) 19.304% 35.947% 21.235%
PGIM India Mid-Cap Fund (G) 6.152% 38.449% 19.998%
Axis Mid-Cap Fund (G) -0.706% 21.644% 17.787%
Category Average 4.369% 23.759% 12.934%
BSE Midcap (TR) Index 1.598% 20.870% 10.040%
Data Source: Morningstar

4.      Equity Small-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
Quant Small Cap Fund (G) 6.818% 51.716% 22.803%
Axis Small Cap Fund (G) 9.784% 28.202% 20.114%
SBI Small Cap Fund (G) 12.290% 30.327% 18.160%
Category Average 6.202% 30.693% 13.782%
BSE Midcap (TR) Index 3.872% 29.745% 11.363%
Data Source: Morningstar

5.      Equity Linked Savings Schemes (Tax Saving)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
Quant Tax Plan (G) 18.060% 39.244% 23.675%
Canara Robeco Tax Saver (G) 2.563% 22.216% 16.826%
Mirae Asset Tax Saver (G) 0.187% 20.501% 15.580%
Category Average 2.470% 16.958% 11.240%
BSE 200 (TR) Index 4.244% 17.865% 13.005%
Data Source: Morningstar

6.      Balanced Funds (Aggressive Allocation)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
Quant Absolute Fund (G) 17.268% 30.234 20.322%
ICICI Pru Equity & Debt (G) 11.215% 21.442% 14.318%
Baroda BNP Paribas AEH (G) 3.435% 15.793% 13.743%
Category Average 2.671% 14.847% 10.415%
CRISIL MIF Blended Index PR 1.968% 7.850% 7.669%
Data Source: Morningstar

7.      Balanced Funds (Conservative Allocation)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
Kotak Debt Hybrid (G) 5.040% 12.054% 9.623%
Canara Robeco Hybrid (G) 3.677% 10.111% 8.936%
ICICI Pru Regular Savings (G) 5.440% 9.808% 8.885%
Category Average 4.556% 8.362% 6.471%
CRISIL MIP Blended Index PR 1.968% 7.490% 7.669%
Data Source: Morningstar

8.      Arbitrage Funds (Cash-Futures)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
Nippon Equity Arbitrage (G) 4.434% 4.675% 5.719%
Edelweiss Arbitrage Fund (G) 4.584% 4.828% 5.705%
Axis Arbitrage Fund (G) 4.640% 4.666% 5.601%
Category Average 3.726% 3.932% 4.880%
Benchmark Comparison N.A. N.A. N.A.
Data Source: Morningstar

9.      Government Securities Funds (Gilt Funds)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
Edelweiss G-Sec Fund (G) 2.095% 6.771% 7.821%
DSP G-Sec Fund (G) 2.367% 6.498% 7.638%
ICICI Prudential Gilt Fund (G) 3.490% 7.293% 7.490%
Category Average 1.813% 5.360% 6.332%
I-SEC MIBEX Index TR 1.271% 5.671% 6.805%
Data Source: Morningstar

10.  Corporate Bond Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
ABSL Corporate Debt (G) 3.614% 6.699% 7.238%
Axis Corporate Bond (G) 3.818% 6.891% 7.237%
ICICI Pru Corporate Bond (G) 4.293% 6.672% 7.201%
Category Average 2.609% 5.771% 6.356%
CRISIL ST Bond Fund Index PR 2.879% 5.853% 6.642%
Data Source: Morningstar

11.  Credit Risk Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):

Name of Fund 1-Year Return 3-Year Return 5-Year Return
ICICI Pru Credit Risk Fund (G) 5.405% 7.892% 8.000%
Baroda Credit Risk Fund (G) 4.939% 8.980% 7.422%
HDFC Credit Risk Fund (G) 4.010% 7.735% 7.404%
Category Average 12.975% 5.866% 4.331%
CRISIL ST Bond Fund Index PR 2.879% 5.853% 6.642%
Data Source: Morningstar
12.  Liquid Funds
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Oct-22):
Name of Fund 1-Year Return 3-Year Return 5-Year Return
Quant Liquid Plan (G) 4.648% 4.873% 5.880%
IDBI Liquid Fund (G) 4.413% 4.232% 5.430%
Mahindra Manulife Liquid (G) 4.486% 4.195% 5.419%
Category Average 3.817% 3.600% 4.839%
CRISIL Liquid Fund Index PR 4.578% 4.368% 5.524%
Data Source: Morningstar

Since September 2022, we made some modifications to our presentation on mutual fund returns. We have included category averages and index benchmarks. This not only gives an absolute picture of returns but also a relative picture of the extent of outperformance that the top performers are able to sustain above the index benchmarks. The overall ranking of top performers are almost similar to previous months, barring some minor shifts here and there. Most of the benchmarks considered are in terms of the TR (Total Returns) index so that the benchmark is a lot more reflective of the capital gains and the dividend returns.

Now for the actual good news. Both equity and debt funds outperformed the last month show, but it was less about the numbers and more about the consistency. For instance, equity and debt fund return leaders have continued to maintain consistency in performance across categories. This makes these rankings a reliable barometer and from a financial planning perspective, an important decision point for investors. October 2022 was a whiff of fresh air after the disappointment of September. It needs to be seen if this can be sustained.

Large cap, mid-cap and small caps that MFs traded in September 2022

  • India Infoline News Service
  • 14 Oct , 2022
  • 12:55 PM
FPI flows in September 2022 were a major disappointment after the elevating feeling of $6.44 billion coming in from FPIs in August 2022. In the month of September, the FPIs were net buyers till around the 20th of September. However, post the Fed hiking rates by another 75 bps, FPIs sold nearly $2.4 billion of equities in Indian markets, ending the month with net outflows of $930 million. The good news is that the domestic funds and LIC continued to be net buyers, largely neutralizing the impact on the stock market indices.

Indian equity mutual funds saw inflows more than doubling sequentially in September 2022. Two things stood. NFO inflows stood at Rs8,374 crore for the month (largely sectoral funds) while the net inflow from SIPs (largely equity funds) stood at Rs12,976 crore. Mutual funds can take solace from the fact that even in a tough month, with a plethora of global headwinds, the SIP flows managed to touch an all-time record. Even amidst heavy debt fund selling, equity funds have continued to attract flows; thanks to NFOs and SIPs.

The big question, then, is what did the mutual funds do with all these flows and where did they allocate these funds. Here we look at the major large cap, mid-cap and small cap stocks that the mutual funds bought and sold in the month of September 2022. This is a macro picture at the overall mutual fund level and not focussed on any specific AMC. The idea is to gain insights into the stock preferences of domestic mutual funds as a whole.

What are the large caps that mutual funds bought and sold in September 2022

For the purpose of defining large cap stocks, we will stick to the AMFI definition based on market cap rankings. Let us understanding this AMFI ranking methodology for large caps. The universe of listed stocks on NSE and BSE are ranked descending based on their market cap. Out of this list, the top-100 stocks by market capitalization are classified as large cap stocks. This list is reviewed by AMFI every 6 months to ensure definitions are current. Here are the major large cap stocks that mutual funds bought and sold in September 2022.

We begin with the large cap buying in September 2022. Overall, the mutual funds added 114 lakh shares of HDFC Life Insurance, 96 lakh shares of DLF Ltd, 62 lakh shares of UPL Ltd, 39 lakh shares of Interglobe Aviation, 26 lakh shares of Hero Motocorp, 25 lakh shares of IRCTC Ltd, 24 lakh shares of Adani Enterprises and 21 lakh shares of Berger Paints. Mutual funds also added smaller quantities of Adani Total Gas and Piramal Enterprises. Interestingly, some of the stock buys have been common over the last few months like HDFC Life, Berger Paints and Adani Total Gas. Buying has been focused on stock corrections, where there is value offered on the table.

We now turn to major large cap selling by mutual funds in the month of September 2022. The selling in mineral and metal stocks continued for the third month in succession, even as there was concerted selling in hydrocarbon related PSUs too. A total of 1,081 lakh shares of Tata Steel were sold, apart from 39 lakh shares of JSW Steel and 262 lakh shares of Vedanta Ltd. There seems to be a bias towards selling out of metals in the light of the pressure on metal prices due to the LME prices reacting negatively to weak Chinese demand. A total of 354 lakh shares of Indian Oil Corporation and 336 lakh shares of GAIL India were sold in the hydrocarbon space. In addition, the Indian mutual funds sold 174 lakh shares of Tata Motors as well as 19 lakh shares of Mindtree Ltd and 8 lakh shares of Bajaj Auto. Apart from these, the mutual funds sold smaller quantities in Adani Transmission and Adani Green Energy.

What are the mid-caps that mutual funds bought and sold in September 2022

Let us quickly turn to the methodology deployed to determine if a stock is mid-cap? Here again, we stick to the AMFI definition. Once the top 100 stocks by market cap are classified as large cap stocks (as explained previously), the 101st to 250th ranked stocks by market cap are classified as mid-cap stocks. Here is a quick glance at the mid-cap stocks that mutual funds bought and sold in the month of September 2022.

Let us focus on the mid-cap buying first. In September 2022, mutual funds overall added 633 lakh shares of Punjab National Bank and 400 lakh shares of BHEL. Mutual Funds also added 197 lakh shares of CG Power & Industrial Solutions, 106 lakh shares of LIC Housing Finance, 100 lakh shares of Canara Bank, 96 lakh shares of Devyani International, 77 lakh shares of Syngene International, 27lakh shares of Hatsun Agro Products and 24 lakh shares of Sun TV Network. In addition, mutual funds also added a small quantity of Abbott India. The mid-cap buying was focused on alpha targets, buying stocks with the high favourable price traction.

We now turn to the major mid-cap selling. In September 2022. Mutual Funds sold 1,629 lakh shares of Vodafone Idea, 448 lakh shares of Motherson Sumi Wiring and 300 lakh shares of Ashok Leyland among the heavy sell candidates. Mutual funds also sold 72 lakh shares of SAIL, 69 lakh shares of Bank of India, 18 lakh shares of Aditya Birla Capital and 11 lakh shares of Varun Beverages Ltd. In addition, the mutual funds were also marginal sellers in ICICI Securities, Gujarat Fluorochemicals and L&T Technology Services (LTTS).

What are the small caps that mutual funds bought and sold in September 2022

Finally we turn to the small cap stocks category. On market cap ranking, the stocks ranked 251st and lower are classified as small caps as per AMFI definition. We continue to use that definition for our rankings also. Here we take a quick look at some of the key small cap stocks where mutual funds were active in September 2022.

In September 2022, mutual funds added 319 lakh fresh shares of Ujjivan Small Finance Bank, 156 lakh shares of Triveni Turbine, 59 lakh shares of GR Infraprojects, 24 lakh shares of Railtel Corporation, 15 lakh shares of Jubilant Ingrevia and 8 lakh shares each of Mayur Uniquoters and Safari Industries. Mutual funds also added smaller quantities of AMI Organics in the month of September 2022.

Finally, let us look at small-cap selling in September 2022. Mutual funds sold 115 lakh shares of Indiabulls Housing Finance, 69 lakh shares of Sterlite Technologies, 35 lakh shares of Elgi Equipment, 34 lakh shares of Dishman Carbogen Amcis, 12 lakh shares of JK Paper, 8 lakh shares of Aditya Birla Sun Life AMC, 6 lakh shares each of TCNS Clothing and Mahanagar Gas (MGL) as well as 5 lakh shares each of Mazagon Docks and Chennai Petroleum.

What is the gist of the story that emerges from September 2022 mutual fund churn data? In the large caps, there is a shift out of the global stories to domestic driven stories. There is still a lot of alpha hunting that is happening in the mid-caps and the small caps. Apparently, mutual funds are still finding the risk-reward favourable, apart from strong inflows.

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The short term returns across all the equity and even debt mutual funds were positively impacted, although the positive impact was more visible in the equity fund categories.

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