What the big 10 fund houses bought and sold in October 2023

21 Nov 2023 , 09:24 AM

Why are we looking closely only at the AUM leaders

There are two ways to evaluate the mutual fund action. One is at a stock level and the other is at a fund level. In fact, both are important. Here we will look at specific stock buying and selling by individual AMCs and obviously, the focus will be on the big AMCs with the largest equity AUM in India. In India, star fund managers are no less than Bollywood icons; at least in terms of popularity among investors. But, you obviously cannot look at all the AMCs. India has more than 44 active AMCs and this number is growing on a regular basis. It would be next to impossible to look at the buying and selling actions of all AMCs; and it may actually be redundant too. We can get a fairly reliable picture by looking at the top 10 AMCs by equity fund AUM. As per the latest AMFI data, these top 10 funds by equity AUM would cover more than 90% of the overall equity AUM and over 80% of all the mutual fund churn happening in Indian equities. That is the focus, our focus would be largely on the leaders.

Bank sponsored AMCs still dominate the AUM sweepstakes

Needless to say, the top-10 list continues to be dominated by the bancassurance plays; which are essentially the mutual funds that are backed by banks. These bank-backed funds account for half of the top 10 by equity AUM. At this stage, we evaluate the shifts in their equity portfolio at 2 levels. At the first level, we look at the large cap stocks which the fund purchased, sold or even the stocks where these funds were neutral during the month of October 2023. At the second level, we check which are the most preferred stocks of each fund house from an alpha perspective. These are size agnostic, and would typically be small cap or mid-cap stocks, although not necessarily. This is like a lateral dashboard of the large caps that these funds are churning as well as the stocks where they are doing alpha hunting. Alpha hunting can mean fresh additions or pure accretion to existing positions.

SBI Mutual Fund: equity portfolio churn in October 2023

Let us first look at the shares that SBI Mutual Fund bought in the month of October 2023, across all market cap classes but predominantly large caps. In terms of MOM percentage increase, SBI MF added to its positions in HDFC Bank, and Tata Consultancy Services (TCS). There appears to be a tinge caution from SBI Mutual Fund on the long side. SBI was neutral on 4 stocks viz., ICICI Bank, Reliance Industries, Bharti Airtel, and Bajaj Finance Ltd.

SBI MF also cut its stakes in several stocks and this list included, a substantial cut in positions in State Bank of India (SBI) and smaller position reductions in ITC Ltd, Infosys Ltd and Larsen & Toubro Ltd (L&T). The fund’s top 5 stock picks for October 2023 in terms of percentage accretion in holdings include smart additions to stocks like Aptus Value Housing, Mahindra Lifespaces and JSW Infrastructure. It made fresh additions to Nazara Technologies, and Sundaram Fasteners in October 2023.

ICICI Prudential Mutual Fund: equity portfolio churn in October 2023

Let us turn to the large cap shares that ICICI Prudential Mutual Fund bought in October 2023. In terms of MOM percentage increase, ICICI Prudential Mutual Fund added to its positions substantially in ICICI Bank, Larsen & Toubro (L&T), Infosys Ltd, Reliance Industries Ltd and NTPC Ltd. It also added smaller positions in HDFC Bank, Maruti Suzuki Ltd, Sun Pharmaceuticals Ltd and Axis Bank Ltd. ICICI Prudential Mutual Fund was neutral on just one frontline stock i.e., Bharti Airtel Ltd in October 2023.

The bias of ICICI Prudential Mutual Fund in October 2023 was largely on the buy side and it was not a seller in any of the large cap stocks. The fund’s top 5 stock picks for October 2023 included additions to stocks like CIE Automotive, Petronet LNG Ltd, Navin Fluorine International Ltd, Zydus Lifesciences Ltd and Inox Wind Ltd. Most where largely alpha picks.

HDFC Mutual Fund: equity portfolio churn in October 2023

Let us first look at the shares that HDFC Mutual Fund bought in October 2023, mainly  in the large cap space. In terms of MOM percentage increase, HDFC Mutual Fund added to its positions very aggressively in HDFC Bank, ICICI Bank and Axis Bank Ltd. It also added to its positions in State Bank of India and Reliance Industries Ltd to a lesser extent. However, HDFC Mutual Fund chose to be neutral on stocks like Infosys Ltd, Larsen & Toubro Ltd (L&T) and ITC Ltd during the month of October 2023.

On the sell side, HDFC mutual Fund cut positions in stocks like NTPC Ltd and Bharti Airtel Ltd. The fund’s top 5 stock picks for October 2023 based on percentage increase in holdings included the accretion to stocks like Havells India Ltd, Powergrid Corporation, Voltas Ltd, Zomato Ltd, and Mphasis Ltd. 

Nippon India Mutual Fund: equity portfolio churn in October 2023

Let us move on to the stocks Nippon India MF bought in October 2023, across large caps. In terms of MOM percentage increase, Nippon India MF added to positions substantially in ICICI Bank Ltd, HDFC Bank and Axis Bank Ltd. In addition, it also added to its positions in Infosys Ltd, Coal India Ltd and NTPC Ltd. Nippon Fund stayed neutral on three stocks during the month of October 2023, viz, Powergrid Corporation, ONGC and State Bank of India (SBI). It was a month when the fund was aggressively lapping up large cap stocks in volumes.

What about the large cap stock exits? During October 2023, Nippon India MF cut its positions in just one stock viz., Reliance Industries Ltd. The fund’s top 5 stock picks for October 2023 based on percentage increase in holdings included enhancement of stake in stocks like Metropolis Healthcare, NALCO Ltd, Blue Dart Express, Bharat Forge Ltd, and Indus Towers Ltd.

UTI Mutual Fund: equity portfolio churn in October 2023

Let us now turn to the oldest fund in India and check what are the shares that UTI Mutual Fund bought and sold in October 2023? In terms of MOM percentage increase, UTI MF added to its large cap positions substantially in only one stock; Kotak Mahindra Bank Ltd. In addition, they also added smaller quantities of HDFC Bank Ltd, Reliance Industries, and Larsen & Toubro Ltd (L&T). The fund was surprisingly neutral on 6 stocks viz. ICICI Bank Ltd, Infosys Ltd, Axis Bank Ltd, ITC Ltd, Tata Consultancy Services (TCS) and Bajaj Finance Ltd for the month of October 2023.

On the exit side, UTI was not a seller even in a single stock for the month of October 2023. The fund’s top 5 stock picks for October 2023 based on the percentage increase in holdings included enhancement of stake in Sundaram Finance, Zee Entertainment, Oil India, JSW Infrastructure Ltd, and CSB Bank Ltd.

Aditya Birla Sun Life (ABSL) Mutual Fund: equity portfolio churn in October 2023

Let us now look at the shares that Aditya Birla Sun Life (ABSL) Mutual Fund bought in October 2023; predominantly in the large cap space. In terms of MOM percentage accretion, ABSL MF added to its positions substantially only in Bajaj Finance Ltd and to a lesser extent in stocks like Infosys Ltd, Reliance Industries Ltd, Bharti Airtel Ltd and Sun Pharma. However, ABSL Mutual Fund stayed neutral on 2 stocks viz., Axis Bank Ltd and State Bank of India (SBI) for the month of October 2023.

Interestingly, ABSL MF was relatively aggressive on the sell side. The fund cut positions quite aggressively in Larsen & Toubro Ltd (L&T), while it cut positions to a moderate level in HDFC Bank Ltd and ICICI Bank Ltd in October 2023. The fund’s top 5 stock picks for October 2023 based on percentage accretion in holdings included enhancement of stake in stocks like Vodafone Idea Ltd, TVS Holdings Ltd, Suntech Realty, Asian Paints, and IDFC First Bank.

Axis Mutual Fund: equity portfolio churn in October 2023

Let us now turn to the shares that Axis Mutual Fund traded in October 2023, across market cap classes. In terms of MOM percentage increase, once again, Axis Mutual Fund did not add to its positions in too many stocks with Cholamandalam Investment & Finance Company being the sole exception. However, Axis Mutual Fund was neutral in 4 stocks viz., HDFC Bank Ltd, Nestle India Ltd, Pidilite Industries and Info Edge India Ltd (Naukri). It was largely a sell-side story for Axis Mutual Fund in the month of October 2023; and the story is almost a repeat of the story in August and September 2023. Clearly, they are opting to stay light at the top of the markets.

The real story was quite aggressive on the sell side. Axis Mutual Fund was an aggressive seller in October 2023 across Bajaj Finance Ltd, Avenue Supermarts Ltd (D-Mart), ICICI Bank Ltd, Tata Consultancy Services (TCS) and PI Industries Ltd in the month of October 2023. The fund’s top 5 stock picks for October 2023 based on the percentage accretion in holdings were L&T Finance Holdings, Delhivery Ltd, SBI Life Insurance Company, Aurobindo Pharma and Bajaj Auto Ltd.

Kotak Mutual Fund: equity portfolio churn in October 2023

Here is a quick look at stocks that Kotak Mutual Fund bought in October 2023, across market cap classes. In terms of MOM percentage increase, Kotak Mahindra MF was extremely aggressive on Infosys Ltd, HDFC Bank Ltd and Maruti Suzuki Ltd. In addition, Kotak MF added smaller quantities of ICICI Bank, Larsen & Toubro (L&T), Bharat Electronics Ltd (BEL) and Axis Bank Ltd to its shopping basket in the month. However, Kotak Mutual Fund opted to stay neutral on State Bank of India (SBI) in the month of October 2023.

There were two stocks in which Kotak Mutual Fund cut positions including Reliance Industries Ltd and Ultratech Cements Ltd. The fund’s top 5 stock picks for October 2023 based on percentage accretion in holdings included enhancement in holdings in Marico Ltd, Asian Paints, ICICI Prudential Life Insurance, Dalmia Bharat, and Escorts Kubota Ltd. 

Mirae Mutual Fund: equity portfolio churn in October 2023

Mirae has seen one of the fastest growth in equity AUM in last few years. Among the frontline stocks that Mirae Mutual Fund bought aggressively in October 2023 was Kotak Mahindra Bank wherein its holdings increased by 27% in the month. In addition, the fund also added aggressively to Reliance Industries Ltd and Larsen & Toubro (L&T); apart from a smaller accretion to State Bank of India (SBI). The fund opted to remain neutral on Infosys Ltd in the month of October 2023.

During the month of October 2023, Mirae MF sold aggressively in HCL Technologies Ltd, Bharti Airtel Ltd and HDFC Bank. It also sold smaller quantities of Axis Bank Ltd and ICICI Bank Ltd. The fund’s top 5 stock picks for October 2023 based on percentage accretion in holdings included enhancement in its stake in UPL Ltd, Grasim Industries Ltd, Gujarat Fluorochemicals Ltd (GFL), Campus Activewear Ltd and Mahindra & Mahindra Ltd (M&M) in the month of October 2023.

DSP Mutual Fund: equity portfolio churn in October 2023

Finally, let us look at what DSP Mutual Fund did in October 2023. The fund increased its holding in HDFC Bank Ltd  substantially and to a lesser extent in Axis Bank Ltd, IPCA Laboratories Ltd and Infosys Ltd. DSP Mutual Fund opted to remain neutral ICICI Bank Ltd, Alkem Laboratories Ltd and Emami Ltd for the month of October 2023.

In terms of selling, DSP MF was a seller across several frontline counters Power Finance Corporation (PFC), Bharat Forge Ltd and Bajaj Finance Ltd. The fund’s top 5 stock picks for October 2023 based on percentage increase in holdings were GAIL India Ltd, Vodafone idea Ltd, Rainbow Children’s Medicare Ltd, Apar Industries and Tata Steel Ltd.