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

12 Jan 2024 , 09:24 AM

Hail the leaders of equity fund AUMs

The month of December 2023 was a special month for mutual funds. For the first time, the mutual fund AUM crossed the Rs50 trillion mark (50 lakh crore). At Rs50.78 trillion, the total AUM of Indian mutual funds stands at $612 billion in dollar terms. The growth in mutual fund AUM has been frenetic in the post 2014 period and especially post the pandemic. Mutual fund AUM has two aspects to it. Part of the AUM is driven by the flows into mutual funds, which have been robust in recent quarters. However, a bigger chunk of the AUM of equity funds is also driven by the value accretion due to a surge in the generic indices like the Nifty and the Sensex. So, why are we looking at the leaders for the AUM story? 

When you look at the actions of the big funds, you obviously cannot be looking at all the AMCs. India has 45 AMCs and many of them are recent entrants with negligible AUM. Their actions may not really matter. Overall fund AUM may not add much value, as it would include funds with substantial debt AUM. A classic example is Edelweiss Mutual Fund. This fund ranks in the top 10 in terms of total AUM, but ranks much lower in terms of equity AUM. 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 group, and our entire effort here would be to look at the buy and sell side action of these leaders. After all, it is them who call the shots in this space.

Bank sponsored AMCs make up half of the Big-10

The top-10 AMC list continues to be dominated by the bank sponsored AMCs; accounting for half of the top 10 by equity AUM. For banks, the mutual funds are a natural cross-sell, so the outcome is evident in the numbers. At this stage, we evaluate shifts in equity portfolio at 2 levels. At the first level, we look at the large cap stocks which the specific fund bought, sold or even the stocks where these funds were neutral during the month of December 2023. At the second level, we check out the most preferred stocks of each fund house from an alpha perspective; and these are mostly mid-sized stocks, outside the index purview. Alpha hunting can take the form of fresh additions or accretion to existing holdings.

SBI Mutual Fund: equity portfolio churn in December 2023

Let us first look at the shares that SBI Mutual Fund bought in the month of December 2023, across all market cap classes but predominantly large caps. In terms of MOM percentage increase, SBI MF added to its positions substantially in State Bank of India and to a lesser extent in Reliance Industries and ITC Ltd. There appears to be persistent caution from SBI Mutual Fund on the long side. SBI was neutral on 4 stocks in the month viz., ICICI Bank, Infosys Ltd, Bharti Airtel and Bajaj Finance Ltd.

SBI MF also cut its stakes in a few stocks and this list included, a bigger cut in positions in Tata Consultancy Services (TCS) and smaller position reductions in HDFC Bank and Larsen & Toubro (L&T). The fund’s top 5 stock picks for December 2023 in terms of percentage accretion in holdings include additions to stocks like Bank of India, Indian Bank, Nippon Life India AMC, REC Ltd and Mahindra Lifespaces. The one fresh addition was Sundaram Clayton.

ICICI Prudential Mutual Fund: equity portfolio churn in December 2023

Let us turn to the large cap shares that ICICI Prudential Mutual Fund bought in December 2023. ICICI Prudential Mutual Fund turned aggressive buyer in Reliance Industries and Maruti Suzuki Ltd in December 2023. It also added to its holdings in Bharti Airtel, Sun Pharma, ICICI Bank and to a lesser extent in Axis Bank and Infosys Ltd. ICICI Prudential MF was not neutral on any stock in the month of December 2023.

Unlike, in the month of November, when the fund was an aggressive seller, it is largely a buyer in December 2023. However, there were sell candidates for the fund. It sold a substantial quantity of shares in HDFC Bank Ltd and sold smaller quantities of stocks in NTPC Ltd and Larsen 7 Toubro (L&T). The fund’s top 5 stock picks for December 2023 included additions to stocks like Bank of India, Apollo Tyres, Mankind Pharma, Indian Bank and Star Health & Allied Insurance. it added fresh stocks like JK Tyres and KFIN Technologies.

HDFC Mutual Fund: equity portfolio churn in December 2023

Let us first look at the shares that HDFC Mutual Fund bought in December 2023, mainly  in the large cap space. In terms of MOM percentage increase, HDFC Mutual Fund added to its positions aggressively in Axis Bank Ltd. It also added significantly to its positions in ICICI Bank and Larsen & Toubro (L&T). In addition, it added smaller quantities of State Bank of India, Reliance Industries, Bharti Airtel, and ITC Ltd. The only stock that HDFC Mutual Fund was neutral in December 2023 was HDFC Bank.

On the sell side, HDFC mutual Fund cut positions aggressively in NTPC Ltd and sold smaller quantities of Infosys Ltd. The fund’s top 5 stock picks for December 2023 based on percentage increase in holdings and fresh additions included stocks like Sapphire Foods, ACC Ltd, IDFC First Bank, Kaynes Technology and PB Fintech (Paisabazaar). It also added fresh positions in Bank of India and Fusion Micro Finance in December 2023.

Nippon India Mutual Fund: equity portfolio churn in December 2023

Let us move on to the stocks Nippon India MF bought in December 2023, across large caps. In terms of MOM percentage increase, Nippon India MF added to positions substantially in State Bank of India, Axis Bank, and ICICI Bank. In addition, it also added to its positions in Powergrid Corporation, and Infosys Ltd in the month. Nippon Fund stayed neutral on just one stock in the month of December 2023, viz, Reliance Industries Ltd.

What about the large cap stock exits? During December 2023, Nippon India MF cut its positions quite sharply in NTPC Ltd and Coal India Ltd and to a lesser extent in HDFC Bank and ONGC Ltd. The fund’s top 5 stock picks for December 2023 based on percentage increase in holdings included accretions to stocks like Apollo Tyres, CESC Ltd, One97 Communications (Paytm), Gujarat Gas, and JSW Energy Ltd.

UTI Mutual Fund: equity portfolio churn in December 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 December 2023? In terms of MOM percentage increase, UTI MF added to its large cap positions in Larsen & Toubro (L&T), Kotak Mahindra Bank, and Reliance Industries Ltd. The fund was neutral on 1 stock viz. Bharti Airtel and the fund was more on the selling side in the month.

On the exit side, UTI was a seller in several stocks including ITC Ltd, Axis Bank, Infosys Ltd, HDFC Bank, ICICI Bank and Tata Consultancy Services (TCS). The fund’s top 5 stock picks for December 2023 based on the percentage enhancement in stake include, Mankind Pharma, Supreme Industries, Bharat Heavy Electricals Ltd (BHEL), Raymond Ltd, and Great Eastern Shipping Company Ltd (GE Shipping).

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

Let us now look at the shares that Aditya Birla Sun Life (ABSL) Mutual Fund bought in December 2023; predominantly in the large cap space. In terms of MOM percentage accretion, ABSL MF added to its positions substantially Reliance Industries Ltd and Larsen & Toubro (L&T) and to a lesser extent in stocks like HCL Technologies. However, ABSL Mutual Fund stayed neutral on 1 stock viz., Sun Pharmaceutical Industries Ltd (Sun Pharma) for the month of December 2023.

Interestingly, ABSL MF was relatively aggressive on the sell side. The fund cut positions quite aggressively in HDFC Bank and Bharti Airtel Ltd, while it cut positions to a moderate extent in Bharti Airtel, Axis Bank, State Bank of India, ICICI Bank and Infosys Ltd in December 2023. The fund’s top 5 stock picks for December 2023 based on percentage accretion in holdings included enhancement of stake in Piramal Enterprises, Hindustan Copper, SRF Ltd, V-Guard Industries, and Wipro Ltd. Fresh additions in the month were quite marginal.

Axis Mutual Fund: equity portfolio churn in December 2023

Let us now turn to the shares that Axis Mutual Fund traded in December 2023, across market cap classes. In terms of MOM percentage increase, Axis Mutual Fund added aggressively to its positions in just one stock viz. Cholamandalam Investment & Finance Company. However, Axis Mutual Fund was also neutral in just one stock viz. ICICI Bank. Obviously, much of the action was on the sell side.

The story was quite aggressive on the sell side. Axis Mutual Fund was an aggressive seller in December 2023 across Pidilite Industries, Avenue Supermarts (D-Mart), Nestle India, Bajaj Finance, and Info-Edge (Naukri). In addition, the fund was a moderate net seller in TCS, Torrent Power and HDFC Bank. The fund’s top 5 stock picks for December 2023 based on the percentage accretion in holdings were Varun Beverages, Ajanta Pharma, Steel Authority of India Ltd (SAIL), Torrent Pharma Ltd, and RR Kabel Ltd. Fresh additions were marginal.

Kotak Mutual Fund: equity portfolio churn in December 2023

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

There were 4 stocks in which Kotak Mutual Fund cut positions. It cut positions aggressively in Reliance Industries Ltd and it cut moderately in Ultratech Cements, Bharat Electronics (BEL), and HDFC Bank Ltd. The fund’s top 5 stock picks for December 2023 based on percentage accretion in holdings included sharp additions to Hindustan Aeronautics (HAL), Mankind Pharma, Coforge, Coal India and REC Ltd. Fresh additions were very marginal.

Mirae Mutual Fund: equity portfolio churn in December 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 December 2023 there was just one stock, Kotak Mahindra Bank. In fact, Mirae stayed neutral on just one stock viz. Reliance Industries and was a net seller in the other eight stocks in December 2023.

During the month of December 2023, Mirae MF sold aggressively in NTPC Ltd, State Bank of India, Infosys Ltd, and ICICI Bank. It also sold smaller quantities in HDFC Bank, Bharti Airtel, Axis Bank and Larsen & Toubro (L&T). The fund’s top 5 stock picks for December 2023 based on percentage accretion in holdings included enhancement in Indian Bank, Coal India, Vijaya Diagnostic Centre, Container Corporation (CONCOR), and One97 Communications (Paytm). Fresh additions were not too significant.

DSP Mutual Fund: equity portfolio churn in December 2023

Finally, let us look at what DSP Mutual Fund did in December 2023. The fund increased its holdings substantially in ICICI Bank and to a lesser extent in Bajaj Finance Ltd. DSP Mutual Fund opted to remain neutral on Bharat Forge Ltd for the month of December 2023.

In terms of selling, DSP MF was an aggressive seller in Power Finance Corporation (PFC), Alkem Laboratories, and Infosys Ltd. The fund also sold smaller quantities of Axis Bank, HDFC Bank, IPCA Laboratories and Emami Ltd. The fund’s top 5 stock picks for December 2023 based on percentage increase in holdings were RBL Bank, Aurobindo Pharma, SRF Ltd, Bandhan Bank, and SAIL. Fresh additions were not too significant.