Kshitij Anand Moneycontrol News
Mutual Funds made a net investment of Rs 11,000 crore in the month of April compared to a little over Rs 2,000 crore net investment made in the month of March. However, some fund managers decided to exit from these top 20 stocks with market value aggregating up to Rs 80,237 crore.
Top 20 stocks in which fund managers preferred to exit positions include blue chip names like Infosys, Coal India, Cipla, HCL Technologies, TCS, Aurobindo Pharma, Sun Pharma, United Spirits, Tech Mahindra, Ashok Leyland across mutual fund, IDBI Capital said in a report.
Stocks in which mutual fund managers preferred to book profits are largely from non-performing sectors like IT, and pharma which are marred down by regulatory concerns as well as strong appreciation in the currency.
Apart from IT and pharma, fund managers sold stocks from sectors such as power, telecom, and select auto pockets.
“MFs are shifting their exposure from defensive and cyclical sectors like commodities to earnings growth-oriented sectors. In the month of April, MFs had provided a strong inflow of Rs 11,250 crore which is amongst the highest ever domestic inflows were ever seen,” Vinod Nair, Head Of Research at Geojit Financial Services told Moneycontrol.
“We have been experiencing a strong surge in retail investment since the last 2-3 years. In FY16 MF inflows was Rs 87,800 crore which has increased to Rs 96,000 crore in FY17 (Equity + ELSS-Equity + 70% of Balanced Funds), please note that we have assumed that 70% of the money in the balanced scheme is invested as equity,” he said.
Top stocks in which MF exited their positions include names like Infosys (19 crore shares shed), followed by Coal India (nearly 13 crore shares were shed), and Cipla (7.5 crore shares were shed).
“MFs exited their holding from these stocks on muted growth prospects, poor financial performance, as well as stretched valuation,” Vaibhav Agrawal- Head of Research and ARQ at Angel Broking, told Moneycontrol.
“For Infosys, the IT exporter has been growing at the lower rate over last few years. The lower revenue guidance that the company has given indicates that the low growth is likely to be a new normal for the company,” he said.
More flows yet to enter markets via SIPs:
Systematic Investment Plan or SIP as it is commonly known is an investment plan (methodology) offered by Mutual Funds wherein one could invest a fixed amount in a mutual fund Scheme periodically at fixed intervals.
SIP has been gaining popularity among Indian MF investors, as it helps in Rupee Cost Averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market.
AMFI data shows that the MF industry had added about 6.26 lacs SIP accounts each month on an average during the FY 2016-17, with an average SIP size of about Rs 3,200 per SIP account. During FY 16-17, a total amount of Rs 43,921 crore was collected through SIP.
SIP is a very convenient method of investing in mutual funds through standing instructions to debit your bank account every month, a trend which most experts think will only pick up in times to come.
“I am shouting from 2001-2002. I said, okay foreigners, but there is going to be a tsunami of Indian money. There has to be. Morgan Stanley has reported that the local money in whatever form whether mutual funds, insurance or provident funds or individuals was about USD 60 billion in the last 10 years,” Rakesh Jhunjhunwala, Partner at Rare Enterprises said in an interview with CNBC-TV18.
“They are predicting between USD 425 billion and USD 825 billion in the next 10 years. And I think they are going to be right,” he said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
