The outflow from equity and equity-oriented mutual fund schemes continues even though markets scaled new highs in February following the Union Budget. Equity funds witnessed an outflow for the eighth consecutive month in February 2021 as investors withdrew Rs 4,534.36 crore. In January, the outflow was at Rs 9,253.22 crore.
Among equity-oriented schemes, flexi-cap funds saw the maximum redemptions at Rs 4,497.23 crore against a net outflow of Rs 5,933.67 crore in the previous month.
"Investors opted to book profits as markets scaled new high. Some investors are redeeming their investments in mutual funds and investing directly in stocks," said Anup Bhaiya, founder of Mumbai-based Money Honey Financial Services.
Sandip Jabuani and Dhwanik Shah of Narnolia Financial Services said investors remain cautious during strong bull phases and inflows can be expected in case of a correction.
The BSE Sensex and Nifty50 rallied more than 6 percent in February but underperformed broader markets. The BSE midcap index registered 10.5 percent gains and the smallcap index showed a 12 percent upside during the month.
Contributions through systematic investments plans (SIPs) in mutual fund schemes dropped to Rs 7,528 crore in February compared to Rs 8,023 crore in the previous month, mainly due to two non-working days at the end of the month.
ICICI Direct has come out with a list of largecap, midcap and smallcap stocks that saw maximum buying and selling by mutual funds in February.
Among largecaps, IndusInd Bank, Tata Motors, DLF, United Spirits and Godrej Consumer Products witnessed the highest buying by asset management companies (AMCs). The highest selling was seen in Punjab National Bank, IDBI Bank, Adani Enterprises, Hindustan Zinc and Bandhan Bank.
February saw a reversal of sorts for at least two stocks. In January, Godrej Consumer Products was among the top five stocks to witness selling, while Punjab National Bank was on AMCs' buying list.
In the midcap space, the highest buying by equity mutual funds was seen in L&T Finance Holdings, Steel Authority of India, Shriram Transport Finance Company, Indian Railway Catering & Tourism Corporation and GMR Infrastructure.
On the other side, Zee Entertainment Enterprises, The New India Assurance, Sun TV Network, Nippon Life India Asset Management and Dixon Technologies (India) witnessed maximum selling.
L&T Finance Holdings and Steel Authority of India were among the top five stocks on the midcap selling list in January.
Among smallcaps, mutual funds made the highest purchases in Poly Medicure, Esab India, Mayur Uniquoters, Indiabulls Housing Finance and PVR in February. Maximum selling was seen in Allcargo Logistics, Engineers India, Igarashi Motors India, KRBL and Route Mobile.
AMCs seem to have continued selling in Route Mobile as the stock was also among the top five smallcaps to see the highest selling in January.
As per the Sebi data, mutual funds have been net sellers in equity since June 2020 to the tune of Rs 1.23 lakh crore. However, foreign investors, on net basis, continued to be buyers in equity since October 2020, buying more than Rs 1.8 lakh crore of shares.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.