How the pecking order of MFs has changed?
For over 15 years, the mutual funds with the largest AUM was one of the big-3 viz. Reliance MF (now Nippon), HDFC Mutual Fund and ICICI Prudential Mutual Fund. With Reliance MF going through its own problems, SBI Fund had emerged the third largest mutual fund in India; and that was the case till December 2019. In January 2020, that pecking order has shifted with SBI Mutual Fund becoming the largest MF with AUM of Rs382,000cr followed by HDFC Mutual Fund at Rs3,78,000cr and ICICI Pru MF at Rs3,68,000cr. Of course, the difference in AUM is minor but SBI MF has seen an accretion of assets to the tune of Rs21,000cr in the last one month itself. In the last 15 months, SBI MF has been one of the fastest growing MFs in terms of AUM. So, this time around we continue our AUM based coverage and cover SBI Mutual Fund first, followed by HDFC MF and ICICI Pru MF.
What SBI Mutual Fund bought and sold in January 2020?
SBI MF has enjoyed the highest equity fund AUM for quite some time now. That edge continues for SBI with $28 billion invested in equities. The fund has over 41% of its equity assets invested in financial stocks (at par with Nifty) and nearly 9% invested in technology stocks.
SBI MF made some interesting new introductions into its portfolio in Jan-20. For example, SBI MF purchased CDSL for the first time in its equity portfolio, considering that the stock has corrected quite sharply in India and could be the best proxy for financialization of savings and the rise of the equity cult. During the month, SBI MF full exited its positions in JK Tyre, Laurus Labs and Blue Dart.
For the last few months (since the AGR order) SBI MF has been extremely positive on Bharti Airtel. Even in Jan-20, it added nearly 1.37cr shares of Bharti Airtel to its various funds. It also added SJVN and Lemon Tree Hotels to its already existing holdings. However, SBI MF reduced its stake in stocks like NHPC, Tata Motors and Vedanta.
What HDFC MF bought and sold in January 2020?
HDFC MF with AUM of Rs3.78 trillion still remains a formidable force, although it has fallen into second place after a very long time in the AUM rankings. HDFC MF has nearly $22 billion invested in equities and has 33% of its equity corpus in financials. Interestingly, it also has a 12% exposure to industrials.
For the month of Jan-20, HDFC MF made some mid-cap introductions into its portfolio. It added La Opala and Radico Khaitan largely to play the expected spurt in consumer demand for these products. At the same time, HDFC MF also unwound its positions in McLeod Russell and ENIL, companies that are facing a host of problems at this point of time.
HDFC MF continued to add to its existing position in power stocks like NTPC and PFC apart from an interesting accretion of nearly 1cr shares in Ambuja Cements. Like in the previous months, HDFC MF also booked out partial profits in Reliance and HDFC Bank, apart from lightening its position in aluminium major, Hindalco.
What ICICI Pru MF bought and sold in January 2020?
With nearly $21 billion in equity AUM and Rs3,68,000cr in overall AUM, ICICI Pru still remains a formidable player in the mutual funds space. ICICI Pru has a much lower exposure to financials at 28% but has a 12% exposure to the cyclical materials space.
Most of the new buys and exits for the ICICI Mutual Fund during Jan-20 have been in the mutual funds space (its in-house fund). However, the accretions and reductions present an interesting story. ICICI Pru MF added to its existing positions in Tata Power and Indian Oil while it reduced its positions in NHPC, SBI and Power Grid.
To sum it up, decisions have been largely stock specific and agnostic to capitalization. But the growth of AUM at SBI MF will, perhaps, be the big story of Jan-20.