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Mar 15, 2022
Did retail investors double down on their mutual fund investments in February 2022 spotting the opportunity in beaten down quality stocks?
Data revealed by the AMFI certainly shows that.
Yet again, retail investors kept faith in Indian equity mutual funds in the month of February 2022.
Data for the month of February 2022, which was released last week, showed that investors poured in a net Rs 197.1 bn in equity-oriented funds, compared to Rs 148.9 bn in January.
A growth of 32% month-on-month shows that despite relentless FII selling, and added volatility owing to geopolitical tensions, retail individuals are believing in the India growth story.
February 2022 marked the 12th consecutive month of inflows.
If we see category wise, all segments witnessed inflows last month.
The big gainers were sector funds and flexicap funds, attracting huge inflows of more than Rs 30 bn each. Following them were largecap fund inflows which increased to Rs 23.4 bn from Rs 18.9 bn in the previous month.
Meanwhile, midcap fund inflows also jumped to Rs 19.5 bn.
The recent selloff has brought down quality stocks, even bluechips like HDFC and the like. So it was along the expected lines that largecap funds would again be the preferred choice.
While everything is well on the equity segment, the debt segment is telling another story. Whenever there's uncertainty in the rate movement, debt funds are the ones to be hit. And that's exactly what happened.
Debt funds saw net outflows but it was limited at Rs 82.7 bn despite liquid funds seeing inflows of Rs 402.7 bn.
The total AUM of the mutual fund industry increased by Rs 315.3 bn to Rs 375.6 bn at the end of February.
Monthly contributions into systematic investment plan (SIP) fell after nine months of consecutive growth. SIP AUM was also hit.
Gold ETFs continued to witness a redemption for the second month in a row. While the redemption figures stood at a high Rs 6.2 bn in January 2022, it reduced to Rs 4.9 bn last month.
Let's look at the stocks that mutual funds traded the most during this period...
Top Stocks Sold by Mutual Funds in February 2022
Largecaps: Indian mutual funds trimmed their positions in largecap stocks such as HDFC AMC, Vedanta, SAIL, IRCTC, and Tata Power.
Heavy selling was also seen in Zomato.
This was the second consecutive month of selling for HDFC AMC, IRCTC, and SAIL.
Midcaps: From the midcap space, mutual funds offloaded Escorts, Colgate, PNB, Oil India, and BHEL.
Smallcaps: CE Info Systems, PTC India, Amara Raja Batteries, Oriental Hotels, and Granules India saw maximum selling by MFs from the smallcap space in February 2022.
Here again, Amara Raja Batteries, Granules, and PTC India saw massive outflow for the second straight month.
Top Stocks Bought by Mutual Funds in February 2022
Largecaps: Coming to buying, Piramal Enterprises, PB Fintech, DLF, and HDFC Life Insurance among other largecaps, witnessed massive inflows.
Midcaps: From the midcap space, fund managers loaded up shares of GMR Infra, Bandhan Bank, Vodafone Idea, Laurus Labs, and Indian Energy Exchange (IEX).
Smallcaps: Aegis Logistics, Hindustan Copper, Equitas SFB, and Metropolis Healthcare were the top smallcap buys.
Top Equity Mutual Funds in February 2022
Here is the list of top 10 mutual fund houses as per their equity asset under management (AUM) as of February 2022.
Top 10 Equity Mutual Funds as per AUM
| Top Fund Houses | Equity AUM (Rs bn) |
|---|---|
| SBI Mutual Fund | 3,657.8 |
| ICICI Prudential Mutual Fund | 2,060.3 |
| HDFC Mutual Fund | 1,798.5 |
| Nippon India Mutual Fund | 1,417.0 |
| UTI Mutual Fund | 1,397.4 |
| Axis Mutual Fund | 1,345.3 |
| Kotak Mutual Fund | 1,207.4 |
| Aditya Birla SL Mutual Fund | 1,079.0 |
| Mirae Asset Mutual Fund | 870.3 |
| DSP Mutual Fund | 631.6 |
What India's Top Mutual Funds Bought and Sold in February 2022
SBI Mutual Fund
India's largest equity fund held Rs 3,658 bn in equities as of February 2022.
The top four equity holdings of the fund include HDFC Bank, Reliance Industries, ICICI Bank, and Infosys.
Here's what SBI Mutual Fund bought and sold in February 2022.
New Buys Value as on 28 February 2022 (Rs m) Vedant Fashions Ltd. 7,952.30 Equitas Small Finance Bank Ltd. 1,836.50 Metropolis Healthcare Ltd. 107.20 Indiabulls Housing Finance Ltd. 75.30 Intellect Design Arena Ltd. 25.50 Syngene International Ltd. 0.90 Complete Sell Value as on 31 January 2022 (Rs m) Escorts Ltd. 674.70 Nazara Technologies Ltd. 114.60 CE Info Systems Ltd. 43.80 Polycab India Ltd. 31.00 Chambal Fertilisers and Chemicals Ltd. 22.70 Top Increase / Decrease in Stakes Change in No. of Shares Vodafone Idea Ltd. 42,630,000 Zee Entertainment Enterprises Ltd. 2,747,844 GMR Infrastructure Ltd. 990,000 Matrimony.Com Ltd. -291,396 Indigo Paints Ltd. -229,421 FSN E-Commerce Ventures Ltd. -2,012,026 Data Source: ACE MF, PersonalFN Research ICICI Prudential Mutual Fund
ICICI Prudential Mutual Fund stands as the second largest equity fund with Rs 2,060 bn in equities as of February 2022. The same figure in the month of January 2022 was Rs 2,080 bn.
The top three equity holdings of ICICI Prudential Mutual Fund include ICICI Bank, Infosys, and Bharti Airtel.
Here's what the fund bought and sold in February 2022.
New Buys Value as on 28 February 2022 (Rs m) Vedant Fashions Ltd. 444.70 Techno Electric & Engineering Company Ltd. 30.40 GMR Infrastructure Ltd. 7.70 Complete Sell Value as on 31 January 2022 (Rs m) Metro Brands Ltd. 275.10 Sansera Engineering Ltd. 160.40 Top Increase / Decrease in Stakes Change in No. of Shares Aditya Birla Capital Ltd. 4,137,289 Equitas Small Finance Bank Ltd. 10,218,509 Indiabulls Housing Finance Ltd. 764,244 Escorts Ltd. -512,350 Affle (India) Ltd. -350,497 KPIT Technologies Ltd. -573,920 Data Source: ACE MF, PersonalFN Research HDFC Mutual Fund
Following ICICI Prudential Mutual Fund we have HDFC Mutual Fund with Rs 1,798.5 bn in equities as of February 2022.
The top five equity holdings of the fund include ICICI Bank, State Bank of India, Infosys, Reliance Industries, and HDFC Bank. It also has a good exposure to L&T and NTPC.
Here's what HDFC Mutual Fund bought and sold in February 2022.
New Buys Value as on 28 February 2022 (Rs m) Adani Wilmar Ltd. 1,427.00 National Aluminium Company Ltd. 290.80 Bayer CropScience Ltd. 127.00 Vodafone Idea Ltd. 103.80 Manappuram Finance Ltd. 62.60 Birlasoft Ltd. 24.40 Amara Raja Batteries Ltd. 21.30 Page Industries Ltd. 20.30 Dalmia Bharat Ltd. 2.00 Laurus Labs Ltd. 1.50 Complete Sell Value as on 31 January 2022 (Rs m) Abbott India Ltd. 322.40 MRF Ltd. 85.10 Astral Ltd. 10.70 Top Increase / Decrease in Stakes Change in No. of Shares Indian Energy Exchange Ltd. 1,376,250 Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 15,600 Ashok Leyland Ltd. 3,678,500 Indiabulls Housing Finance Ltd. -527,000 Sun TV Network Ltd. -285,000 Escorts Ltd. -447,150 Data Source: ACE MF, PersonalFN Research
Buying the dip certainly seems to be working for new investors who have joined the equity market.
After receiving inflows for a 12th straight month, mutual funds were flush with cash. Seeing the buying opportunity after benchmark indices had fallen over 4% last month, fund managers loaded on beaten-down blue-chip stocks.
Infosys, Reliance, and HDFC were the top and obvious buys.
Meanwhile, fund managers reduced exposure to Tata Consultancy Services (TCS), and metal stocks after the recent run-up. They also sold shares of some new-age businesses.
2022 has started on a bumpy ride and it's not just about the Russia-Ukraine conflict now. There are higher commodity costs, inflation concerns, and interest rates concerns.
How the mutual fund buying and selling trend pans out in the month of March 2022 remains to be seen. It seems as if March 2022 is likely to see some outflows, as the Russia-Ukraine conflict continues to escalate.
But government's plan to postpone the LIC IPO may come to rescue here. Reports state that LIC's IPO will be postponed to the next fiscal year, which will likely help limit March redemptions.
We will keep you updated on all the developments from this space.
Stay tuned.
As you're interested in what mutual funds are buying and selling, check out Equitymaster's Powerful Stock Screener.
This tool tracks the stocks recently bought by mutual funds along with the stocks recently sold by them.
Happy investing!
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. Learn more about our recommendation services here...
Yash Vora is a financial writer with the Microcap Millionaires team at Equitymaster. He has followed the stock markets right from his early college days. So, Yash has a keen eye for the big market movers. His clear and crisp writeups offer sharp insights on market moving stocks, fund flows, economic data and IPOs. When not looking at stocks, Yash loves a game of table tennis or chess.
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