Adani Total Gas, Nykaa, Zomato and more: Top large caps MFs bought in May

Mutual funds increased their stakes in a number of large-cap stocks in May, betting on their continued growth prospects. The top 10 stocks bought by mutual funds in May were:

  • HDFC
  • Hindalco Industries
  • Zomato
  • HDFC Life Insurance Company
  • FSN E-Commerce Ventures (Nykaa)
  • Adani Total Gas
  • Indus Towers
  • JSW Steel
  • Tata Elxsi
  • UPL

These stocks are all leaders in their respective industries and have strong track records of growth. They are also well-positioned to benefit from the ongoing economic recovery.

On the other hand, mutual funds sold their stakes in a number of large-cap stocks in May. The top 10 stocks sold by mutual funds in May were:

  • Life Insurance Corporation of India (LIC)
  • Kotak Mahindra Bank
  • Indian Oil Corporation
  • Hero MotoCorp
  • Hindustan Aeronautics
  • Hindustan Zinc
  • Torrent Pharmaceuticals
  • Macrotech Developers
  • Eicher Motors
  • Pidilite Industries

These stocks are all facing some challenges, such as rising competition, slowing growth, or regulatory headwinds. As a result, mutual funds are taking a cautious approach and reducing their exposure to these stocks.

Overall, the data from ICICI Direct suggests that mutual funds are bullish on the Indian stock market and are betting on the continued growth of large-cap stocks. However, they are also taking a cautious approach and are reducing their exposure to stocks that are facing some challenges.

MFs bought

Among mid-caps, Vedanta Fashions was the top pick while Indian Railways Finance Corporation was dumped the most. 

Here is a list of top 10 buys and sells in the mid-cap space. 

Mid cap purchases

In the small-cap space, Jupiter Wagons, Astra Microwave Products, HEG Ltd,  Globus Spirits, Mazagon Dock Shipbuilders, Ujjivan Financial Services were among the ten most sought after stocks, while Easy Trip Planners, Railtel Corporation of India, Nocil,  Mastek, were among the most sold.

Small cap stocks

Here are other key mutual fund trends observed in May 2023

Mutual Fund AUM Hits New High

The Indian mutual fund industry saw a record-breaking month in May, with average assets under management (AAUM) touching a lifetime high of Rs 42.95 trillion. This is equivalent to $521 billion in US dollars.

The year-on-year growth of 14.93% was driven by strong inflows from both retail and institutional investors. In fact, investments through the Systematic Investment Plan (SIP) route reached a record high of Rs 14,749 crore.

However, equity mutual fund inflows dipped in May after witnessing a net inflow of Rs 2,906 crore. This was primarily due to profit booking by investors, as the markets experienced some volatility in the month.

Despite the dip in equity inflows, the small-cap segment saw strong growth. In May, small-cap funds registered a net inflow of Rs 3,283 crore. This is a positive sign for the market, as it indicates that investors are still bullish on the long-term prospects of small-cap companies.

Overall, the Indian mutual fund industry is in a strong position. The record-breaking AAUM and strong inflows are a testament to the trust that investors have in the industry. I am confident that the industry will continue to grow in the coming years.

Individual Investors Favor Equity Funds

Individual investors in India are increasingly putting their money in equity funds. As of May 2023, they held 79% of their mutual fund assets in equity-related schemes, up from 75% in the previous year. This trend is likely due to the strong performance of the Indian stock market in recent years.

Individual investors are also more likely to hold their equity fund investments for longer periods of time. As of May 2023, nearly 56.5% of their equity fund investments were held for more than two years. This is in contrast to the general equity average of 44.9%.

The total number of individual investor accounts in mutual funds has also increased in recent years. As of May 2023, there were 14.74 crore (147.4 million) individual investor accounts, up from 12.5 crore (125 million) in the previous year. This growth is likely due to the increasing popularity of mutual funds as an investment option.

What does this mean for investors?

The trend towards equity funds is a positive sign for the Indian stock market. It suggests that individual investors are confident in the long-term prospects of the market. However, it is important to remember that equity funds are a risky investment and that past performance is not a guarantee of future results. Investors should always do their own research before investing in any mutual fund.

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