Mutual funds continued to trim positions in heavyweights with highest withdrawals in Bharti Airtel, HDFC Bank, RIL and HDFC Ltd , according to data sourced from Edelweiss Alternative Research and ACE MF
As mutual funds continued to see withdrawals in equity schemes in February, they continued to dump index heavyweights. Data showed that 9 out of 10 stocks sold by mutual funds in February were index heavyweights or largecaps.
During the month, mutual funds continued to trim positions in heavyweights with highest withdrawals in Bharti Airtel ( ₹2800 crore), HDFC Bank ( ₹1700 crore), Reliance Industries ( ₹1500 crore) and HDFC Ltd ( ₹1400 crore), according to data sourced from Edelweiss Alternative Research and ACE MF. Most of the large mutual houses were underweight in banking stocks and overweight on capital goods in February.
In contrast, foreign institutional investors (FIIs) continued to invest into Indian equities in the month February with banks and financial stocks emerging as the top bets, indicating a divergent trend.
Market data showed that in February, FIIs invested $1.96 billion into banking and financial stocks, NSDL data analysed by Edelweiss Alternative Research showed. That represents 55% of the total FII inflows of $3.56 billion into Indian equities in the month. Banking and financial stocks have been seeing a continuous net inflow of FII money since October except for a net outflow of $345 million in January. Pagaria added that FII ownership in banking has seen an increase of 109 basis points in last three months.
Meanwhile, top five stocks which saw net inflow by mutual funds in February were NTPC ( ₹722 crore), IndusInd Bank ( ₹705 crore), L&T ( ₹650 crore), Tata Motors ( ₹585 crore) and Tata Consultancy Services ( ₹557 crore).
The midcap data review shows that mutual funds sold most in Dixon Technologies, Max Financial, PI Industries, Tata Chemicals and Ashok Leyland. Among smallcaps they sold most Engineers India, Indian Energy Exchange and Just Dial.
In February, multi-cap funds, large- and mid-cap funds and focused funds were the three categories to see net inflows. There was an outflow of ₹1,280.15 crore in large-cap funds
Equity schemes reported net outflows for eight months in a row, while monthly systematic investment plans (SIP) contributions declined even as stocks hit record highs in February. According to data released by the Association of Mutual Funds in India (Amfi) on Tuesday, net outflows from equity mutual fund schemes stood at ₹6,764.45 crore in February, almost half the ₹12,078.54 crore outflow in January and December’s record ₹13,121 crore.