What the Big-3 Mutual Funds bought and sold in December 2022
- 18 Jan , 2023
- 1:42 PM
- In December 2022, debt funds saw net outflows of Rs21,947 crore while net inflows into equity funds were subdued at Rs7,303 crore.
Passive funds saw strong inflows of Rs15,398 crore during December 2022. There are 2 points to note here. Firstly, the NFO collections were robust at Rs8,486 crore in November 2022, but these NFO flows were dominated by bond ETFs, multi-asset allocation funds and closed ended Fixed Term Plans (FTP).
Gross monthly SIP flows for December 2022 touched record highs of Rs13,573 crore, despite strong global headwinds. Investors are not only being added to SIPs (as evidenced by rising folios), but investors are also staying put through the highs and lows, although one must admit that the SIP stoppage ratio has gone up recently, probably due to uncertainty and higher inflation. The big question is what the big funds did with these flows. We look at portfolio shifts of 3 largest equity fund houses viz. SBI MF, ICICI Prudential MF and HDFC MF.
Big 10 fund houses and the AUM they control
Before looking at what the mutual funds bought and sold in December 2022, here is the ranking of the top AMCs on equity AUM for the month.
Top Fund Houses ranked By equity fund AUM | Equity AUM (Rs crore) As on 31-Dec-2022 |
|---|---|
| SBI Mutual Fund | ₹ 466,010 |
| ICICI Prudential Mutual Fund | ₹ 241,770 |
| HDFC Mutual Fund | ₹ 217,160 |
| UTI Mutual Fund | ₹ 166,040 |
| Nippon India Mutual Fund | ₹ 163,200 |
| Axis Mutual Fund | ₹ 139,480 |
| Kotak Mutual Fund | ₹ 139,280 |
| Aditya Birla SL Mutual Fund | ₹ 112,550 |
| Mirae Asset Mutual Fund | ₹ 102,920 |
| DSP Mutual Fund | ₹ 67,520 |
Data Source: AMFI
In December 2022, equity fund AUM of major fund houses tapered as NFO flows were largely focused on the debt side while the markets ended in the negative in the month of December, leading to depletion in value. On equity AUM front, ICICI Prudential AMC maintained its gap over HDFC MF, while UTI and Nippon India Fund are moving up rapidly. Bancassurance names still account for half of the top-10 players.
These top-10 AMCs account for over 90% of industry-wide equity AUM, and hence their actions are closely tracked by traders and investors. As a proxy, we look at the buy and sell actions of the 3 biggest AMCs by equity AUM for December 2022 viz. SBI MF, ICICI Pru MF and HDFC MF. Let us start with the biggest player in the Indian mutual fund segment.
SBI MF key trades in equity markets in December 2022
SBI Mutual Fund is the largest by overall AUM and equity AUM by a margin. In fact, the equity AUM of SBI MF at Rs4.66 trillion is more than the combined equity AUM of ICICI Prudential and HDFC MF as of end December 2022. The top equity holdings of SBI MF are ICICI Bank, Reliance Industries and HDFC Bank. Here are the major stocks that SBI MF bought and sold in the month.
In December 2022, IPO participation was back and they dominated the fresh purchases by SBI MF. Let us first look at the 2 fresh investments made by SBI Mutual Fund in the month of December into IPOs. SBI MF invested Rs92.08 crore in Sula Vineyards IPO and Rs82.56 crore in Elin Electronics IPO. Apart from these IPO investments, SBI MF also made fresh investments of Rs1.57 crore in Sagar Cements, Rs0.47 crore in BEML Ltd and Rs0.31 crore in UCO Bank. Apart from these fresh buys, SBI MF added to its existing positions in several stocks in December 2022. SBI MF added 349.71 lakh shares of Bank of Baroda, 127.50 lakh shares of Bank of India and 0.49 lakh shares of Sundaram Fasteners during the month.
Let us now turn to the exits made by SBI MF in December 2022. During the month, SBI MF fully exited small positions in 3 stocks viz; Allcargo Logistics, NIIT Ltd, Saregama India Ltd and Shipping Corporation of India (SCI). There were also stocks where SBI MF reduced existing positions. In December 2022, SBI MF sold 5.72 lakh shares of Oil India Ltd, 1.99 lakh shares of Greenpanel Industries Ltd and 1.50 lakh shares of Happiest Minds Technologies.
ICICI Prudential MF key trades in equity markets in December 2022
ICICI Pru AMC is the second largest fund by overall AUM and equity AUM for more than two years now. Its equity AUM at Rs2.42 trillion makes it an influential player in the equity space. The top equity holdings of ICICI Prudential MF are ICICI Bank, HDFC Bank and Infosys. Here is a look at what ICICI Pru MF bought and sold in December 2022.
ICICI Prudential Mutual Fund was not active in the IPO market in December 2022. During the month, ICICI Pru MF made fresh investments in Rainbow Children’s Medicare Ltd of Rs131.97 crore. In addition, ICICI Prudential Mutual Fund also made small fresh investments in Repco Home Finance, BEML Ltd, Supreme Petrochem, Eureka Forbes and Lloyds Metals and Energy Ltd. The fund added to existing positions in several stocks. It added 17.98 lakh shares of Nippon Life Asset Management Ltd, 9.59 lakh shares of Sapphire Foods and 0.38 lakh shares of Lemontree Hotels Ltd.
Let us turn to stocks that ICICI Pru MF exited totally and where it reduced its stake. In December 2022, ICICI Prudential MF fully exited small residual holdings in four stocks viz; Dhanuka Agritech, SpiceJet Ltd, Strides Pharma Science Ltd and Vakrangee Ltd. There were also stocks where ICICI Prudential MF reduced holdings in December 2022. It cut its stake in Amara Raja Batteries by 2.86 lakh shares, Shipping Corporation of India by 0.12 lakh shares and Saregama India Ltd by 0.05 lakh shares.
HDFC Mutual Fund key trades in equity markets in December 2022
HDFC Mutual Fund may have dropped to third position in equity AUM rankings, but at Rs2.17 trillion, its equity shifts still remain a key influencing factor in the markets. As of December 2022, the top equity holdings of HDFC MF were ICICI Bank, HDFC Bank, SBI, Infosys and Reliance Industries.
HDFC MF was extremely active in IPOs. It made fresh IPO investments in Sula Vineyards Rs27.87 crore, Uniparts Ltd Rs27.27 crore and Landmark Cars Rs22.92 crore during the month of December 2022. In the secondary market, HDFC MF made fresh purchases of Motilal Oswal Financial Services worth Rs34.32 crore, Fortis Healthcare Rs25.69 crore and Credit Access Grameen Rs13.77 crore. It also made fresh purchases in smaller quantities in Vodafone Idea Ltd and Zydus Lifesciences Ltd. HDFC MF also used the volatility in select stocks to add more at lower levels. It added 8.48 lakh shares of L&T Finance Holdings, 2.07 lakh shares of NMDC Ltd and 1.98 lakh shares of Coromandel International.
Let us turn to stock exits. HDFC MF exited some of its small residual investments in its entirety. This include small quantities of Abbott India Ltd, Polycab India Ltd and Amara Raja Batteries Ltd. In addition, HDFC MF also reduced its positions in Indian Energy Exchange Ltd by 20.44 lakh shares, Adani Enterprises Ltd by 5.58 lakh shares and Berger Paints Ltd by 0.97 lakh shares.
That was the crux of the MF churn story in December 2022? Funds bought selectively in stocks where correction has been steep as well as in select IPOs. However, they also used the volatility to exit stocks where headwinds are strong or momentum is low. Despite headwinds, the bias appears to be towards domestic India based investment stories.
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What the Big-3 Mutual Funds bought and sold in September 2022
- India Infoline News Service
- 17 Oct , 2022
- 6:59 AM
Passive funds also saw strong flows during the month. However, there were two other factors of note during the month. Firstly, the NFO action was back at Rs8,374 crore in September 2022, driven by sectoral and flexi-cap funds. In addition, monthly SIP flows for September 2022 touched record highs of Rs12,976 crore, despite strong global headwinds. The big question is what did the big funds do with all this money that came in. We look at portfolio shifts of the 3 largest fund houses by equity fund AUM viz. SBI MF, ICICI Prudential MF and HDFC MF for September 2022.
Here is how much equity funds the Big-10 manage
Since our focus here is on the stocks that mutual funds bought and sold in September 2022, we benchmark on equity AUM rather than overall AUM.
Data Source: AMFI
In September 2022, equity fund AUM of most major funds surged as the NFO flows combined with SIP flows, despite the indices not showing too much of positive traction in the month. In terms of equity AUM, ICICI Prudential AMC widened its gap over HDFC MF, while UTI and Nippon India Fund are moving up rapidly. The top ranks are dominated by the bancassurance names, accounting for half of the top-10 MF players.
The top-10 AMCs matter because they not only account for over 90% of industry-wide equity AUM, but also set the tone for the stock market action by dealers. As a proxy, we focus on the buy and sell actions of the 3 biggest AMCs by equity AUM for September 2022. SBI MF, ICICI Pru MF and HDFC MF are the bellwether names that set the tone for markets.
Key equity portfolio shifts at SBI MF for September 2022
SBI Mutual Fund is the largest by overall AUM and equity AUM. In fact, the equity AUM of SBI MF at Rs4.33 trillion is more than the equity AUM of ICICI Pru and HDFC MF combined. The top equity holdings of SBI MF are ICICI Bank, Reliance Industries, HDFC Bank and Infosys. Here are the major stocks that SBI MF bought and sold in September 2022.
September 2022 was a month wherein IPOs did make a comeback, but were few and far between. With IPO action tepid, it was more about secondary market action. SBI Mutual Fund made fresh investment in just 4 stock during the month of September 2022. SBI MF bought Rs34.06 crore worth of Sundaram Finance, Rs30.81 crore of Teamlease Finance and Rs2.82 crore of Honeywell Automation. In addition, SBI also invested Rs28.02 crore in the IPO of Harsha Engineering International Ltd. Apart from these fresh buys, SBI MF added to its existing positions in several stocks in September 2022. SBI MF added 3.84 lakh shares of IRCTC, 3.06 lakh shares of Birlasoft Ltd and 1.50 lakh shares of Adani Total Gas during the month of September 2022.
SBI MF fully exited several stocks during the month. It sold entire holdings worth Rs7.84 crore in Sagar Cement, Rs1.70 crore stake in India Pesticides and its holdings worth Rs0.73 crore in Firstsource Solutions. Let us also look at stocks where SBI MF reduced existing positions. In September 2022, SBI MF sold 7.12 lakh shares of Indiabulls Housing Finance, 1.80 lakh shares of Shriram Transport Finance Ltd and 0.72 lakh shares of Petronet LNG. Clearly, SBI MF has used the volatility to undertake a strategic churn of its portfolio.
Key equity portfolio shifts at ICICI Prudential MF for September 2022
ICICI Pru AMC has been the second largest fund by overall AUM and also by equity AUM for more than a year. Its equity AUM at Rs2.25 trillion makes it an influential player in the equity space. The top equity holdings of ICICI Prudential MF are ICICI Bank, Infosys and HDFC Bank. Here is a look at what ICICI Pru MF bought and sold in the month of September 2022.
ICICI Prudential Mutual Fund was an aggressive fresh buyer in several stocks in September 2022, after lying low for several months. The fund used the volatility in the market to make some very focused purchases of stocks in the month. It made fresh purchases of Rs28.23 crore of Butterfly Gandhimathi Appliances, Rs24.73 crore in Harsha Engineers IPO, Rs1.71 crore in Shoppers Stop and Rs1.67 crore in Adani Wilmar.
Apart from these stocks, ICICI Pru MF also bought smaller quantities of stocks like Tejas Networks, Raymond, Greenpanel Industries, TCI, Bharat Rasayan, Aether Industries, Sharda Cropchem and JBM Auto Ltd. There were also stocks where ICICI Pru MF added to its existing positions. It added 20.57 lakh shares of Krishna Institute of Medical Sciences (KIMS), 7.68 lakh shares of Policybazaar and 4.94 lakh shares of Suprajit Engineering.
Let us look at the stocks that ICICI Pru MF exited in totality and where it reduced its stake. During September 2022, ICICI Prudential MF took total exit from Paradeep Phosphates selling its entire stake worth Rs54.20 crore and selling its entire Rs14.83 crore stake in Tamil Nadu Newsprint. In addition, ICICI Pru MF also fully exited smaller positions in Indo Count, Sequent Scientific, Glenmark Lifesciences, Venky, Solara Active Pharma and Tata Steel Long products. There were also stocks where ICICI Prudential MF reduced its holdings in September 2022. It cut its stake in Westlife Development by 1.02 lakh shares and Mastek by 0.44 lakh shares; apart from a smaller reduction in Eris Lifesciences.
Key equity portfolio shifts at HDFC MF for September 2022
HDFC Mutual Fund may have dropped to third position in equity AUM rankings, but at Rs2.00 trillion, its equity shifts still remain a key influencing factor. As of September 2022, the top equity holdings of HDFC MF were ICICI Bank, HDFC Bank, SBI, Infosys and Reliance.
Fresh buying by HDFC MF was seen in Harsha Engineers IPO (Rs27.94 crore), Adani Total Gas (Rs13.79 crore), NALCO (Rs5.61 crore), India Cements (Rs2.34 crore), Rain Industries (Rs1.60 crore), Birlasoft (Rs1.18 crore) and Abbott India (Rs0.92 crore). It also bought small fresh quantities of Hindustan Copper and PVR Ltd. HDFC MF also used the volatility in select stocks to add more at lower levels to buffer its holdings. It added 56.43 lakh shares of Tech Mahindra, 0.97 lakh shares of Berger Paints and 0.04 lakh shares of Page Industries.
Let us turn to stock exits. HDFC MF exited two stocks in totality during the month of September 2022. It sold its entire stake worth Rs1.03cr in HG Infra and Rs0.26 crore in GE Power India. In addition, HDFC MF also cut its positions in Indian Oil Corporation by 156.99 lakh shares, Jubilant Foodworks by 2.50 lakh shares and Zydus Lifesciences by 1.31 lakh shares.
Here is the crux of the MF churn story in September 2022? Funds have bought selectively in stocks where correction has been steep but have also used the volatility to exit stocks where the headwinds are strong or momentum is low.
Here is how much equity funds the Big-10 manage
Since our focus here is on the stocks that mutual funds bought and sold in September 2022, we benchmark on equity AUM rather than overall AUM.
|
Top Fund Houses ranked By equity fund AUM |
Equity AUM (Rs crore) As on 30-Sep-2022 |
|---|---|
| SBI Mutual Fund | ₹ 433,470 |
| ICICI Prudential Mutual Fund | ₹ 224,750 |
| HDFC Mutual Fund | ₹ 200,270 |
| UTI Mutual Fund | ₹ 157,560 |
| Nippon India Mutual Fund | ₹ 157,110 |
| Axis Mutual Fund | ₹ 142,150 |
| Kotak Mutual Fund | ₹ 133,190 |
| Aditya Birla SL Mutual Fund | ₹ 109,220 |
| Mirae Asset Mutual Fund | ₹ 97,980 |
| DSP Mutual Fund | ₹ 66,530 |
In September 2022, equity fund AUM of most major funds surged as the NFO flows combined with SIP flows, despite the indices not showing too much of positive traction in the month. In terms of equity AUM, ICICI Prudential AMC widened its gap over HDFC MF, while UTI and Nippon India Fund are moving up rapidly. The top ranks are dominated by the bancassurance names, accounting for half of the top-10 MF players.
The top-10 AMCs matter because they not only account for over 90% of industry-wide equity AUM, but also set the tone for the stock market action by dealers. As a proxy, we focus on the buy and sell actions of the 3 biggest AMCs by equity AUM for September 2022. SBI MF, ICICI Pru MF and HDFC MF are the bellwether names that set the tone for markets.
Key equity portfolio shifts at SBI MF for September 2022
SBI Mutual Fund is the largest by overall AUM and equity AUM. In fact, the equity AUM of SBI MF at Rs4.33 trillion is more than the equity AUM of ICICI Pru and HDFC MF combined. The top equity holdings of SBI MF are ICICI Bank, Reliance Industries, HDFC Bank and Infosys. Here are the major stocks that SBI MF bought and sold in September 2022.
September 2022 was a month wherein IPOs did make a comeback, but were few and far between. With IPO action tepid, it was more about secondary market action. SBI Mutual Fund made fresh investment in just 4 stock during the month of September 2022. SBI MF bought Rs34.06 crore worth of Sundaram Finance, Rs30.81 crore of Teamlease Finance and Rs2.82 crore of Honeywell Automation. In addition, SBI also invested Rs28.02 crore in the IPO of Harsha Engineering International Ltd. Apart from these fresh buys, SBI MF added to its existing positions in several stocks in September 2022. SBI MF added 3.84 lakh shares of IRCTC, 3.06 lakh shares of Birlasoft Ltd and 1.50 lakh shares of Adani Total Gas during the month of September 2022.
SBI MF fully exited several stocks during the month. It sold entire holdings worth Rs7.84 crore in Sagar Cement, Rs1.70 crore stake in India Pesticides and its holdings worth Rs0.73 crore in Firstsource Solutions. Let us also look at stocks where SBI MF reduced existing positions. In September 2022, SBI MF sold 7.12 lakh shares of Indiabulls Housing Finance, 1.80 lakh shares of Shriram Transport Finance Ltd and 0.72 lakh shares of Petronet LNG. Clearly, SBI MF has used the volatility to undertake a strategic churn of its portfolio.
Key equity portfolio shifts at ICICI Prudential MF for September 2022
ICICI Pru AMC has been the second largest fund by overall AUM and also by equity AUM for more than a year. Its equity AUM at Rs2.25 trillion makes it an influential player in the equity space. The top equity holdings of ICICI Prudential MF are ICICI Bank, Infosys and HDFC Bank. Here is a look at what ICICI Pru MF bought and sold in the month of September 2022.
ICICI Prudential Mutual Fund was an aggressive fresh buyer in several stocks in September 2022, after lying low for several months. The fund used the volatility in the market to make some very focused purchases of stocks in the month. It made fresh purchases of Rs28.23 crore of Butterfly Gandhimathi Appliances, Rs24.73 crore in Harsha Engineers IPO, Rs1.71 crore in Shoppers Stop and Rs1.67 crore in Adani Wilmar.
Apart from these stocks, ICICI Pru MF also bought smaller quantities of stocks like Tejas Networks, Raymond, Greenpanel Industries, TCI, Bharat Rasayan, Aether Industries, Sharda Cropchem and JBM Auto Ltd. There were also stocks where ICICI Pru MF added to its existing positions. It added 20.57 lakh shares of Krishna Institute of Medical Sciences (KIMS), 7.68 lakh shares of Policybazaar and 4.94 lakh shares of Suprajit Engineering.
Let us look at the stocks that ICICI Pru MF exited in totality and where it reduced its stake. During September 2022, ICICI Prudential MF took total exit from Paradeep Phosphates selling its entire stake worth Rs54.20 crore and selling its entire Rs14.83 crore stake in Tamil Nadu Newsprint. In addition, ICICI Pru MF also fully exited smaller positions in Indo Count, Sequent Scientific, Glenmark Lifesciences, Venky, Solara Active Pharma and Tata Steel Long products. There were also stocks where ICICI Prudential MF reduced its holdings in September 2022. It cut its stake in Westlife Development by 1.02 lakh shares and Mastek by 0.44 lakh shares; apart from a smaller reduction in Eris Lifesciences.
Key equity portfolio shifts at HDFC MF for September 2022
HDFC Mutual Fund may have dropped to third position in equity AUM rankings, but at Rs2.00 trillion, its equity shifts still remain a key influencing factor. As of September 2022, the top equity holdings of HDFC MF were ICICI Bank, HDFC Bank, SBI, Infosys and Reliance.
Fresh buying by HDFC MF was seen in Harsha Engineers IPO (Rs27.94 crore), Adani Total Gas (Rs13.79 crore), NALCO (Rs5.61 crore), India Cements (Rs2.34 crore), Rain Industries (Rs1.60 crore), Birlasoft (Rs1.18 crore) and Abbott India (Rs0.92 crore). It also bought small fresh quantities of Hindustan Copper and PVR Ltd. HDFC MF also used the volatility in select stocks to add more at lower levels to buffer its holdings. It added 56.43 lakh shares of Tech Mahindra, 0.97 lakh shares of Berger Paints and 0.04 lakh shares of Page Industries.
Let us turn to stock exits. HDFC MF exited two stocks in totality during the month of September 2022. It sold its entire stake worth Rs1.03cr in HG Infra and Rs0.26 crore in GE Power India. In addition, HDFC MF also cut its positions in Indian Oil Corporation by 156.99 lakh shares, Jubilant Foodworks by 2.50 lakh shares and Zydus Lifesciences by 1.31 lakh shares.
Here is the crux of the MF churn story in September 2022? Funds have bought selectively in stocks where correction has been steep but have also used the volatility to exit stocks where the headwinds are strong or momentum is low.
Equity and passive funds keep MF flows in positive territory
- India Infoline News Service
- 11 Nov , 2022
- 9:43 AM
For the month of October 2022, inflows into equity funds remained in the positive as did flows into passive index funds and ETFs. However, the flows into debt funds and hybrid funds remained in the negative territory. Arbitrage funds continued to spoil the game for hybrid funds, but for the first time in over 2 years, the Balanced Advantage Funds (BAFs) saw net outflows in October 2022. Overall, the net inflows into mutual funds at Rs14,047 crore was relatively tepid compared to the median of the previous months.
The big story of October 2022 was that SIP flows finally crossed the Rs13,000 crore mark. The second good news was that the new fund offerings (NFOs) gathered steam and in the month of October 2022, the NFOs managed to collect Rs5,439 crore, largely dominated by sectoral and index funds. Let us quickly turn to the AUM story for October 2022. Assets under management (AUM) below is the combination of flows and capital accretion.
Data Source AMFI
The overall AUM of the mutual fund industry as of the close of October 2022 stood at Rs39.50 trillion. Here are some key trends that emerge from the AUM tabulation as above.
In the current fiscal year, debt fund flows have been under pressure for majority of the months. Even for the month of October 2022, debt funds saw net outflows of Rs2,818 crore. Of course, September was much higher due to treasury commitments of corporates. In comparison, the October 2022 outflows from debt funds are a more mellowed. While the pressure of rising rates is still there, indications are that the rates may be close to peaking.
Here is a quick summary of the colour of debt fund flows in October 2022. The funds that saw positive inflows include Liquid Funds Rs19,085 crore and gilt funds at a very modest Rs146 crore. The inflows into liquid funds were largely a reversal of the outflows in the previous month, when corporates and treasury managers would have withdrawn funds from liquid funds for their quarterly advance tax commitments.
We now turn to the category of debt funds that saw outflows in October 2022; and that is more substantial. Big selling was visible in Overnight Funds Rs7,505 crore, Low Duration Funds Rs2,660 crore, short duration funds Rs2,466 crore, Floater Funds Rs2,444 crore, Money Market Funds Rs1,996 crore, Banking & PSU Funds Rs1,537 crore, Corporate Bond funds Rs1,534 crore, Ultra Short Duration Funds Rs1,145 crore and Credit Risk Funds Rs408 crore. With bond yields holding above 7.3%, the pressure on debt funds is understandable. RBI is not relenting on its hawkish stance, although things may change based on mellowed inflation data from the US.
NFOs and SIPs once again boost equity fund flows in October 2022
Equity fund inflows in October 2022 tapered to Rs9,390 crore. The big thrust to equity flows came from Rs5,439 crore of NFO flows and Rs13,041 crore of SIP inflows in October 2022. Now for the equity fund inflow story! During October 2022, sector funds once again led the way with Rs2,686 crore of inflows; largely supported by a spate of NFOs. Small cap fund flattered with inflows of Rs1,582 crore and mid cap funds with Rs1,385 crore, showing a clear preference among investors for alpha picking. The combination of Multi-cap funds plus flexi-cap funds saw inflows of Rs1,354 crore. Among other key contributors, large & mid-cap funds collected Rs1,190 crore, while value funds and ELSS funds got around Rs400 crore each. Other categories were relatively less significant in terms of size. Dividend yield funds were the only category to see outflows, albeit very small to matter.
One parameter that tells you the story of equity fund flows very eloquently is folio accretion. Folios are MF investor accounts and give a good idea of the retail spread of demand. As of the close of September 2022, equity folios touched an all-time high of 932.34 lakh folios out of total mutual fund folios of 1,390.78 lakhs; or 67.04% share of overall folios.
Hybrid flows lag while passive flows stay in the positive
Hybrid funds saw outflows of Rs2,819 crore in October 2022. This is similar to the trend that we have seen in last few months. Two factors impacted hybrid fund flows. Firstly, NFOs have just started and for the first time in the last 2 years since the pandemic, BAFs saw net outflows of Rs454 crore. The focus is on equity and passive funds now. Secondly, arbitrage funds saw bulk of the outflows of Rs2,470 crore. Other hybrid categories saw relatively smaller flows in the month.
Passive funds were again the big story of October 2022, witnessing healthy inflows of Rs10,261 crore as investors looked for lower cost alpha. The passive surge was led by index funds at Rs5,076 crore while the equity & debt index ETFs saw inflows of Rs4,845 crore in October 2022. Gold Funds and International FOFs also saw marginal inflows in the month of October 2022.
Three important takeaways from the October 2022 MF flows
The story of mutual fund flows in October 2022 can be summed up in 3 key takeaways.
The big story of October 2022 was that SIP flows finally crossed the Rs13,000 crore mark. The second good news was that the new fund offerings (NFOs) gathered steam and in the month of October 2022, the NFOs managed to collect Rs5,439 crore, largely dominated by sectoral and index funds. Let us quickly turn to the AUM story for October 2022. Assets under management (AUM) below is the combination of flows and capital accretion.
| Month |
Debt AUM (Rs trillion) |
Equity AUM (Rs trillion) |
Alternate AUM (Rs trillion) |
Overall AUM (Rs trillion) |
| Oct-21 | 14.31 | 12.97 | 9.41 | 37.33 |
| Nov-21 | 14.52 | 12.78 | 9.42 | 37.34 |
| Dec-21 | 14.05 | 13.34 | 9.72 | 37.73 |
| Jan-22 | 14.13 | 13.38 | 9.89 | 38.01 |
| Feb-22 | 14.09 | 12.95 | 9.91 | 37.56 |
| Mar-22 | 12.99 | 13.65 | 10.31 | 37.57 |
| Apr-22 | 13.56 | 13.66 | 10.42 | 38.04 |
| May-22 | 13.22 | 13.32 | 10.40 | 37.22 |
| Jun-22 | 12.34 | 12.86 | 10.20 | 35.64 |
| Jul-22 | 12.46 | 14.16 | 10.88 | 37.75 |
| Aug-22 | 13.03 | 14.78 | 11.26 | 39.34 |
| Sep-22 | 12.42 | 14.63 | 11.12 | 38.42 |
| Oct-22 | 12.45 | 15.22 | 11.58 | 39.50 |
The overall AUM of the mutual fund industry as of the close of October 2022 stood at Rs39.50 trillion. Here are some key trends that emerge from the AUM tabulation as above.
- The overall AUM has been in a very narrow range for the last 12 months, although it has gyrated sharply with the swings in the equity markets and interest rate movements.
- If you compare the AUM of active equity funds with that of active debt funds, there has been a complete reversal of roles in the last one year. Just a year back, active debt had an overall AUM of Rs14.31 trillion and active equity an AUM of Rs12.97 trillion. As of October 2022, the overall AUM of active debt has fallen to Rs12.45 trillion while the AUM of active equity has surged to Rs15.22 trillion. It is a complete reversal of roles.
- The biggest takeaway is that alternate assets AUM has built heft from Rs9.41 trillion to Rs11.58 trillion in the last one year. Alternate assets include hybrid funds, passive funds and solution oriented funds. There has been a clear preference for passive funds as active fund managers struggle to outperform indices. The good news is that with AUM of Rs11.58 trillion, alternate assets are emerging as a distinct asset class for investors.
In the current fiscal year, debt fund flows have been under pressure for majority of the months. Even for the month of October 2022, debt funds saw net outflows of Rs2,818 crore. Of course, September was much higher due to treasury commitments of corporates. In comparison, the October 2022 outflows from debt funds are a more mellowed. While the pressure of rising rates is still there, indications are that the rates may be close to peaking.
Here is a quick summary of the colour of debt fund flows in October 2022. The funds that saw positive inflows include Liquid Funds Rs19,085 crore and gilt funds at a very modest Rs146 crore. The inflows into liquid funds were largely a reversal of the outflows in the previous month, when corporates and treasury managers would have withdrawn funds from liquid funds for their quarterly advance tax commitments.
We now turn to the category of debt funds that saw outflows in October 2022; and that is more substantial. Big selling was visible in Overnight Funds Rs7,505 crore, Low Duration Funds Rs2,660 crore, short duration funds Rs2,466 crore, Floater Funds Rs2,444 crore, Money Market Funds Rs1,996 crore, Banking & PSU Funds Rs1,537 crore, Corporate Bond funds Rs1,534 crore, Ultra Short Duration Funds Rs1,145 crore and Credit Risk Funds Rs408 crore. With bond yields holding above 7.3%, the pressure on debt funds is understandable. RBI is not relenting on its hawkish stance, although things may change based on mellowed inflation data from the US.
NFOs and SIPs once again boost equity fund flows in October 2022
Equity fund inflows in October 2022 tapered to Rs9,390 crore. The big thrust to equity flows came from Rs5,439 crore of NFO flows and Rs13,041 crore of SIP inflows in October 2022. Now for the equity fund inflow story! During October 2022, sector funds once again led the way with Rs2,686 crore of inflows; largely supported by a spate of NFOs. Small cap fund flattered with inflows of Rs1,582 crore and mid cap funds with Rs1,385 crore, showing a clear preference among investors for alpha picking. The combination of Multi-cap funds plus flexi-cap funds saw inflows of Rs1,354 crore. Among other key contributors, large & mid-cap funds collected Rs1,190 crore, while value funds and ELSS funds got around Rs400 crore each. Other categories were relatively less significant in terms of size. Dividend yield funds were the only category to see outflows, albeit very small to matter.
One parameter that tells you the story of equity fund flows very eloquently is folio accretion. Folios are MF investor accounts and give a good idea of the retail spread of demand. As of the close of September 2022, equity folios touched an all-time high of 932.34 lakh folios out of total mutual fund folios of 1,390.78 lakhs; or 67.04% share of overall folios.
Hybrid flows lag while passive flows stay in the positive
Hybrid funds saw outflows of Rs2,819 crore in October 2022. This is similar to the trend that we have seen in last few months. Two factors impacted hybrid fund flows. Firstly, NFOs have just started and for the first time in the last 2 years since the pandemic, BAFs saw net outflows of Rs454 crore. The focus is on equity and passive funds now. Secondly, arbitrage funds saw bulk of the outflows of Rs2,470 crore. Other hybrid categories saw relatively smaller flows in the month.
Passive funds were again the big story of October 2022, witnessing healthy inflows of Rs10,261 crore as investors looked for lower cost alpha. The passive surge was led by index funds at Rs5,076 crore while the equity & debt index ETFs saw inflows of Rs4,845 crore in October 2022. Gold Funds and International FOFs also saw marginal inflows in the month of October 2022.
Three important takeaways from the October 2022 MF flows
The story of mutual fund flows in October 2022 can be summed up in 3 key takeaways.
- Equity fund flows are increasingly becoming decoupled from the equity market volatility and churn. That can be largely attributed to the consistent flows that equity funds are getting from NFOs and SIPs.
- Debt funds are not taking enough risk and that is the real risk. Perhaps, the Templeton saga has forced mutual funds to play it cautiously, but it will only further deplete AUMs.
- Lastly, alternate classes like hybrids and passive funds are becoming significant in terms of folios and AUM. Passive is finally starting to making sense in India.
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For the month of September 2022, debt funds saw net outflows of Rs65,000 crore while the net inflows into equity funds were positive at Rs14,000 crore.
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