January 2023 saw the highest net money inflow in the last four months. (typical)
Investing in equity mutual funds has become increasingly popular in recent years, with SIP (Systematic Investment Plan) inflows indicating a growing interest in this asset class.
Despite the recent volatility in the Indian stock markets, January 2023 saw the highest net inflow of Rs 125.5 billion into equity mutual funds in the last four months.
This was a significant increase from the inflows seen in the previous three months, and comes on the back of a strong September 2022, when equity mutual funds saw inflows of Rs 141 billion.
Note that the strong inflows came at a time when the primary market has dried up. Not many IPOs are happening right now, but companies are waiting for the right time to launch their offers.
Drone company IdeaForge Technology recently filed draft papers with the market regulator for the first mainboard drone IPO.
Talking about the inflow, this was the 23rd consecutive month.
The net assets under management (AUM) of the mutual fund industry stood at Rs 39.6 trillion as of January 31, 2023, marginally lower than Rs 39.9 trillion in December 2022.
Within the debt category, liquid funds saw the highest outflow of Rs 50.4 billion, while money market funds saw inflows of Rs 64.6 billion.
Now coming to SIP…
Inflows through Systematic Investment Plans (SIPs) again hit a record level in January 2023 and touched Rs 138.6 billion. This is compared to December’s inflow of Rs 135.7 billion.
Let’s take a look at the stocks in which mutual funds traded the most during this period…
Top Stocks Sold by Mutual Funds in January 2023
Largecap: Indian mutual funds reduced their positions in largecap stocks such as Indus Towers, Adani Enterprises and HCL Technologies.
HCL Tech has been witnessing heavy selling by mutual funds since last few months.
This could be due to the IT company reducing its revenue growth and margin guidance for FY23.
Midcap: Mutual funds from the midcap space picked up Vodafone Idea, IDFC First Bank and REC.
Laurus Labs and Route Mobile also saw selling by mutual funds.
lowercase letters: Heritage Foods, Indiabulls Housing Finance and Tata Metaliks witnessed maximum selling by MFs in January 2023 from the smallcap space.
Top Stocks to Buy in January 2023 by Mutual Funds
Largecap: Talking about shopping, Nykaa, Tata Motors and Apollo Hospitals saw heavy footfalls.
Amid selloff in Adani Group shares, several mutual funds added Adani Ports in January 2023. Mutual funds may be of the view that Adani Ports is the only Adani stock worth watching.
Midcap: Mutual funds from the midcap sector bought shares of Dixon Technologies, Paytm and Bank of India.
Buying was also seen in Hindustan Aeronautics (HAL), one of the best defense stocks in India.
lowercase letters: South Indian Bank, Hindware Home and Sula Vineyards made maximum purchases in smallcap stocks.
Top Equity Mutual Funds in January 2023
Here is the list of top 10 mutual fund houses as per their Equity Asset Under Management (AUM) as on January 2023.
What India’s top mutual funds bought and sold in January 2023
India’s largest equity fund held Rs 4,582 billion in equity as of January 2023. The December 2022 figure was Rs 4,660 billion.
Top equity holdings of the fund include HDFC Bank, ICICI Bank and Reliance Industries.
Here’s what SBI Mutual Fund bought and sold in January 2023.
- ICICI Prudential Mutual Fund
ICICI Prudential Mutual Fund was the second largest equity fund house with Rs 2,411 billion in equity as of January 2023. In December 2022, the same figure was Rs 2,418 billion.
The top three equity holdings of ICICI Prudential Mutual Fund include ICICI Bank, Infosys and HDFC Bank.
Interestingly, the fund house did not buy stake in any new company in January 2023.
Here’s what the fund bought and sold in January 2023.
After ICICI Prudential Mutual Fund, we have HDFC Mutual Fund with Rs 2,174 billion in equity as of January 2023. The December 2022 figure was Rs 2,172 billion.
The top five equity holdings of the fund include ICICI Bank, HDFC Bank, State Bank of India, Infosys and Reliance Industries.
Here’s a look at what HDFC Mutual Fund bought and sold in January 2023.
Last word…
Overall, the recent trend in equity mutual fund inflows shows a growing appetite for this asset class among investors, despite short-term market volatility.
The fact that some older stocks have now become favorites among mutual funds underscores the value of a well-diversified portfolio that can weather market volatility.
Significantly, mutual funds have reduced their stake in the shares of Adani Group. Of Adani’s 10 listed companies, only Adani Ports saw good buying while others saw selling by mutual funds.
Adani Group shares started declining in late January 2023, triggered by the Hindenburg Research report. There was a lot of buying and selling in the last week of January amid the selloff.
It remains to be seen how the buying and selling trend of mutual funds unfolds in the month of February 2023. We will keep you updated on all the developments in this space.
stay tuned.
PS: The above snippet 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. This is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
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