For the month of July, inflows into equity mutual funds stayed positive and stood at ₹89 bn.
However, the strength of inflows was relatively tepid. The amount of ₹89 bn received in July 2022 was sharply lower by 42% from June’s ₹155 bn.
The subdued inflows could be due to the volatile stock markets, which affected investor sentiment.
Data revealed by the mutual funds association in India (AMFI) showed that total assets under management for the mutual fund industry rose to ₹37.8 tn as of 31 July 2022, compared to ₹35.6 tn in June 2022.
Debt funds saw net inflows of ₹49.3 bn compared to net outflows of ₹922.5 bn in June 2022.
In the last 5 months, debt funds have seen sharp outflows. This could be due to treasury pressures from corporate funds and fear of rising yields.
Small-cap equity funds saw the highest inflows of ₹17.8 bn, while the flexicap fund category collected ₹13.8 bn. Midcap funds saw collections of ₹12.4 bn, while large-cap funds saw inflows of ₹10.9 bn.
No wonder smallcap stocks and midcap stocks have raced ahead of the benchmark indices.
Inflows through systematic investment plans (SIP) fell marginally to ₹121.4 bn in July 2022 compared to ₹122.8 bn in June.
Meanwhile, SIP accounts went up to 56.1 bn in July compared to 55.5 bn in the previous month. SIPs have been in favor. If anyone asks where to invest in mutual funds, they’ll prefer the SIP route.
The monthly systematic investment plan (SIP) contribution stood at almost the same level where it was in the previous month. Despite the volatility, SIP flows in July 2022 was stable.
Gold exchange traded funds (ETFs) saw outflows of ₹4.6 bn as investors booked profits after a fall in gold prices.
Let’s take a look at the stocks that mutual funds traded the most during this period…
Top Stocks Sold by Mutual Funds in July 2022
Largecaps: Indian mutual funds trimmed their positions in largecap stocks such as Life Insurance Corp (LIC), Indus Towers, and Oil India.
Midcaps: From the midcap space, mutual funds offloaded Indiabulls Housing Finance, NBCC (India), Rain Industries, and Coforge.
Selling was also seen in Solara Active Pharma and Escorts Kubota.
Smallcaps: Ambika Cotton Mills, Butterfly Gandhimathi, and Welspun Enterprises saw maximum selling by MFs from the smallcap space in July 2022.
Top Stocks Bought by Mutual Funds in July 2022
Largecaps: Coming to buying, Deepak Nitrite, REC, and Berger Paints, among other largecaps, witnessed massive inflows.
Midcaps: From the midcap space, fund managers loaded up shares of GMR Infra, Orient Electric, Bharat Forge, Jamna Auto, and Radico Khaitan.
Smallcaps: Pitti Engineering, Morepen Labs, and IOL Chemicals & Pharma were the top smallcap buys.
Top Equity Mutual Funds in July 2022
Here is the list of top 10 mutual fund houses as per their equity asset under management (AUM) as of July 2022.
What India’s Top Mutual Funds Bought and Sold in July 2022
SBI Mutual Fund
India’s largest equity fund held ₹4,146 bn in equities as of July 2022. (June 2022 figure was ₹3,770).
The top four equity holdings of the fund include Reliance Industries, ICICI Bank, HDFC Bank, and Infosys.
Here’s what SBI Mutual Fund bought and sold in July 2022.
ICICI Prudential Mutual Fund
ICICI Prudential Mutual Fund was the second largest equity fund house with ₹2,226 bn in equities as of July 2022. The same figure in the month of June 2022 was ₹2,098 bn.
The top three equity holdings of ICICI Prudential Mutual Fund include ICICI Bank, Infosys, and HDFC Bank.
Here’s what the fund bought and sold in July 2022.
Following last month’s trend, the fund did not make any new stock additions during the month of July 2022.
HDFC Mutual Fund
Following ICICI Prudential Mutual Fund we have HDFC Mutual Fund with ₹1,991 bn in equities as of July 2022 (June 2022 figure was ₹1,806 bn).
The top five equity holdings of the fund include ICICI Bank, HDFC Bank, State Bank of India, Infosys, and Reliance Industries.
Here’s what HDFC Mutual Fund bought and sold in July 2022.
HDFC Mutual fund increased its stake in Zomato last month by investing in the beaten down stock.
You must be aware that the FIIs are coming back to India after selling Indian stocks relentlessly from October 2021 to June 2022. FIIs turned net buyers of nearly ₹50 bn in July 2022.
In August so far, they have bought equities worth over ₹84 bn in the cash segment. FIIs coming back should provide a lot of confidence to mutual fund investors.
If the above data is anything to go by, it appears that fund managers are focusing more on the best smallcap stocks and the best midcap stocks as companies from both these categories are available at attractive valuations due to the selloff in the last few months.
Focusing on the fastest growing stocks which grow sales and profits consistently seem to be the ideal picks.
However, one trend has changed. Mutual funds are now investing in fewer companies as their investment basket has grown to the largest size in years.
ICICI Mutual fund did not make any new additions in June 2022 and continued the trend in July 2022 too.
Since April 2022, the mutual fund industry did not roll out a single new scheme due to delay in implementation of the new norms around pooling of investor funds.
However, fund houses have started launching new fund offers from 1 July as they put in place the new system of funds movements. Nine new fund offers (NFOs) raised ₹14.5 bn in July 2022.
How the mutual fund buying and selling trend pans out in the month of August 2022 remains to be seen.
We will keep you updated on all the developments from this space.
As you’re interested in what mutual funds are buying and selling, check outEquitymaster’s Powerful Stock Screener.
This tool tracks thestocks recently bought by mutual fundsalong with thestocks recently sold by them.
PS: The above piece relies on data from PersonalFN. PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.
Disclaimer:This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
(This article is syndicated from Equitymaster.com)
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