No matter how old an investor is, how much time one has spent in understanding the financials of various companies, what kind of rationale he prefers in picking stocks for his portfolio, investors always keep an eye over the shopping list of mutual funds. Every month investors keep looking over the buying and selling list of mutual funds but the list of August month is more crucial to look after as the index has turned into the overbought zone after hitting its yearly lows in March. As the Indian benchmark has turned to its overbought zone, it is necessary to buy only those stocks that still have room to higher rather than betting upon the expensive bets.
As per Association of Mutual Funds of India “Equity mutual funds have witnessed a spree of outflow in August by Rs 4,000 crore following an outflow of Rs 2,480 crore in July. Leaving aside the equity-linked saving schemes (ELSS), focused fund and sectoral categories, all the other equity categories witnessed net outflow. Inflows from the Systematic Investment Plan (SIP) have been recorded at Rs. 7,792 crores are similar to the figure of Rs. 7,831 crores printed in July. On Foreign Institutional Investors (FII) front, global investors remained net buyers of Rs. 37,856.54 crores.
Buying and selling list in Largecap stocks
Despite the rising caution over financial stocks by market participants as an extension of loan moratorium period, mutual funds love for Banking, Financial Services and Insurance (BFSI) sector has not been diminished. In the banking sector, Axis Bank, Bandhan Bank, HDFC Bank and ICICI Bank have seen a rush for raising stake as valuations seem quite delightful while Reliance Industries has seen redemption pressure as fund managers are unsettled over the execution procedure of fundraising. Infoedge (Naukari.com), SBI Cards, Piramal Enterprise and Wipro were in buying list too. While, FMCG and durable goods such as Marico, Tata Consumer Products, Colgate Palmolive and Havells India witnessed selling due to high valuations.
Buying and selling list in Midcap stocks
The mixed selection has been witnessed in the midcap stocks this month. Fund managers have seen stock-specific more rather than an option for a complete sector. It seems that value buying was the key rather than moving with the wind. New sells in the midcap stocks such as Amararaja Batteries, Jubilant Foods, Manappuram Finance, Bata and Adani Enterprise have put the investors in awe as these stocks have been money multiplier earlier. Vodafone Idea is continued to be in the selling list despite their new business model. On the buying side, defence stocks have captured the sight of fund managers in which shares of Hindustan Aeronautics, Bharat Forge and Ashok Leyland were bought heavily. Tata Power has remained a major bet by mutual funds last month after their debt reduction plan. In the healthcare sector, Apollo Hospitals and Alkem Labs were bought by mutual funds.
Buying and selling list in Smallcap stocks
Smallcap category has never been a flavour of mutual funds but this month some small-caps have managed to make their place in the buying list of fund managers. Mutual funds have added stocks like Sudarshan Chemicals, Matrimony.com, Teamlease services and Finolex Industries. The funds manage have raised stake in Kajaria Ceramics and SunTV while redemption was witnessed in Yes Bank. The mutual funds have added NIIT, GMM Pfaudler, NIIT and Aarti Drugs.
Fresh entries made this month
Edelweiss Mutual fund added the rookie realty player Mindspace Business Park REIT in their portfolio. Largest asset manager SBI has made a fresh entry in Fairchem Organics while second-largest asset manager HDFC has bought Technocraft. ITI MF purchased ADF Foods and Associated Breweries. Sundaram MF added Kovai Medical in their basket.