Stocks that top Mutual Funds bought and sold in February 2023
Mutual funds have seen robust equity fund flows through the year and this has been largely helped by NFO flows and SIP flows during the year. However, the bigger question pertains to the stock that the top mutual fund houses have bought and sold in the month of February 2023. Here will look at 8 of the biggest fund houses in India in terms of equity AUM across various equity and quasi equity classes.
What the big equity fund houses bought and sold in February 2023?
There was action in the large cap space but also some alpha buying in the mid-cap and small cap space. Here is a quick summary of what the top 8 fund houses did in the previous month.
The biggest of them all by AUM by a margin, SBI Mutual Fund, was rather frugal and only added Kotak Mahindra Bank among the large caps to its portfolio to a significant extent. However, it maintained its holdings in ICICI Bank, Reliance Industries, HDFC, ITC and Larsen & Toubro. SBI MF also pared down on its parent company, Bharti Airtel, HDFC Bank and Infosys. Among its top stock picks in the mid cap space were Zomato, Equitas SFB and City Union Bank.
Prudential ICICI Mutual Fund, was rather aggressive in buying stocks in February 2023 as it added significant chunks of Reliance Industries, followed by Bharti Airtel, Sun Pharma, Larsen & Toubro and NTPC Ltd. However, it maintained its neutral stance on Axis Bank and ONGC even as it pared its stake in ICICI Bank, Infosys and HDFC Bank. Among its top stock picks in the mid cap space were Equitas SFB, PVR Ltd and Coforge Ltd.
The third largest fund by AUM, HDFC Mutual Fund was rather aggressive in buying stocks in February 2023. It added significant numbers of Axis Bank, HDFC Ltd, HDFC Bank, State Bank of India and NTPC Ltd. However, it stayed neutral on Infosys Ltd even as the fund pared its stake in ITC, L&T and Reliance Industries. What were the top 3 picks of HDFC Mutual Fund in the mid cap space? It was Dixon Technologies, Gland Pharma, and Birla Corporation.
Nippon India Mutual Fund was also very aggressive in buying large cap stocks in February 2023. Nippon India Mutual Fund was an aggressive buyer in Reliance Industries, followed by Axis Bank, NTPC Ltd, SBI, Infosys Ltd and ONGC. However, it stayed neutral on HDFC Bank and ICICI Bank even as the fund pared its stake in L&T and Power Grid Corporation of India Ltd. In terms of its top 3 stock picks in the mid-cap space, the list includes Syngene International, Kaynes Technology and 3M India.
UTI Mutual Fund, which pioneered the idea of mutual funds in India in 1964, was also very aggressive in buying large caps in February 2023. UTI Mutual Fund aggressively bought Axis Bank, Kotak Mahindra Bank, HDFC Ltd, HDFC Bank and ICICI Bank. However, it stayed neutral on Infosys, Reliance Industries and TCS even as UTI MF pared its stake in Bajaj Finance Ltd and ITC Ltd. In terms of its top 3 stock picks for the month in the mid-cap space, they were Persistent Systems Ltd, IDFC First Bank, Muthoot Finance.
Let us now look at another important fund, which has dominated debt fund space for a long time, and yet is the sixth largest in terms of equity AUM. In the month of February 2023, Aditya Birla Sun Life (ABSL) Mutual Fund bought Axis Bank, HDFC Bank, State Bank of India, Reliance Industries, Sun Pharma, HDFC Ltd, L&T and Infosys among large caps. While it held on to Bharti Airtel, ABSL MF did not cut any positions. Its top mid-cap picks for the month were Syngene International, PVR Ltd and Coforge Ltd.
Axis Mutual Fund was not a major buyer in any of the large cap stocks. For February 2023, Axis MF remained neutral on Pidilite Industries and Info Edge Ltd. However, the fund was a heavy seller in the market during the month as it cut its large cap positions in stocks like Bajaj Finance, ICICI Bank Ltd, TCS, Avenue Supermarts, HDFC Bank, Kotak Mahindra Bank, HDFC Ltd and Infosys. Even as the fund was a seller in large caps, it did pick some mid-cap stocks and added to the portfolio; including Chola Financial, Craftsman Automation and Carborundum Universal.
Finally let us look at how the eighth largest fund by equity AUM (Kotak Mahindra Mutual Fund) churned assets in February 2023. It added two frontline stocks viz. Maruti Suzuki and Axis Bank but opted to remain neutral on Ultratech Cements Ltd during the month. Kotak MF was an aggressive seller in Reliance Industries, ICICI Bank, SBI, HDFC Bank, Infosys, Larsen & Toubro Ltd and SRF Ltd; leaning towards cutting down exposure to large caps to a great extent. However, it did have some favourites in the mid-cap space including stocks like Sundaram Fasteners, Info Edge Ltd and Coforge Ltd.
There are also other funds like Mirae and DSP which are significant in terms of equity AUM. However, the above list would give a fair idea. Clearly, there is some amount of boredom setting into large cap stocks, even as fund houses are aggressively scouting for alpha opportunities in mid cap and small cap space. That seems to be a good strategy; especially when the concerns are at a macro level and pertain to global headwinds. After all, it is the large caps that are most vulnerable to such headwinds.
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