There is a big gap in terms of AUM between the top 3 and the rest of the leaders. However, there has been a clear erosion of AUM across categories in the June quarter. The negative flows of Rs2480cr in Jul-20 will only raise further pressure on the overall AUM. But let us look at what are the stocks that the Top-4 AMCs by AUM bought and sold in July 2020.
What SBI MF bought and sold in July 2020
For over a couple of years, SBI has been the largest fund manager in terms of equity AUM. However, in the last two quarters, SBI MF has also emerged as the largest AMC in terms of overall AUM, pushing HDFC MF to the second slot after a long time.
One of the big buys of SBI MF in July was PVR, the multiplex stock that had been beaten down by the lockdown. SBI Mutual Fund clearly found value as it ramped its holding in PVR to close to Rs80cr on expectations that the lockdown withdrawal on malls and multiplexes should happen soon. During the month, SBI MF also added stocks like City Union Bank, HDFC Life and Supreme Industries. Post Q1 results, SBI MF also ramped up on Infosys.
The big sell idea for SBI MF in July 2020 was Reliance Industries. It was more a case of buying on expectations and selling on news. There have been a slew of downgrades on the stock and the RIL story has shown a phenomenal run gaining more than 140% since March 2020. SBI MF trimmed its stake in Reliance Industries by nearly 4%.
What HDFC MF bought and sold in July 2020
HDFC MF was an aggressive buyer in Yes Bank during the month of July but that appears to be participation in the follow-on public offer of the bank. The FPO had been under-subscribed and HDFC MF ended up holding nearly 16.4 crore shares in Yes Bank. HDFC MF also added stocks like ACC, Muthoot Finance and Wipro to its portfolio. Clearly, Muthoot was a play on the robust rally in gold prices considering the precious metal has rallied nearly 45% in the last one year. Muthoot is one of the largest players in the gold loan segment. HDFC MF also ramped up on its holdings in Infosys.
Like SBI MF, even HDFC MF substantially pared its stake in Reliance Industries after the rally. In July, HDFC MF cut its holdings in RIL by almost one-fourth on valuation concerns. The fund also reduced its holding in HDFC Bank by 5% as financials became vulnerable.
What ICICI Pru MF bought and sold in July 2020
ICICI Pru MF clearly appears to be bullish on pharma and healthcare stocks. Its additions in July 2020 read like a roster list of healthcare stocks. ICICI Pru MF added Torrent Pharma, Divi’s Laboratories, Metropolis Healthcare and Alkem Laboratories to its portfolio. Clearly, the fund has not been too keen to add old pharma favourites like Lupin and Sun Pharma.
ICICI Pru pared its stake in Axis Bank substantially during July 2020 on financial sector concerns ahead of the moratorium withdrawal by RBI. Like SBI MF and HDFC MF, ICICI Pru was also a major seller in Reliance Industries; and that almost looks like the underlying theme of the month. However, unlike SBI MF and HDFC MF, ICICI Pru also heavily sold Infosys paring its stake by nearly one-tenth during the month of July 2020.
What Aditya Birla MF bought and sold in July 2020
Birla Mutual Fund substantially upped its stake in HDFC AMC to Rs70cr; a 70-fold jump in one month. It also added select stocks like Motherson Sumi, PI Industries, UPL and IGL to its portfolio during the month. Like the other big names, Aditya Birla MF also cut its stake in Reliance by more than one-sixth, on the back of valuation concerns. As a sector, Birla was heavily selling into banks; paring its stake in ICICI Bank, Kotak Bank and Axis Bank.
To conclude, the big theme among the leading fund houses appears to be monetizing the profits in Reliance and going underweight in banks. Funds have preferred to play with established themes in the current market like pharma and agricultural growth. Probably, the post moratorium scenario should give a clearer picture of fund investment strategy.