Fund managers of top MF themes poured in over Rs9000 crore in largecap stocks like Axis Bank, HDFC, HDFC Bank, SBI Life Insurance, Bharti Airtel, GAIL, ITC, Tata Motors, Yes Bank, and Sun Pharma.
There will always be a debate on Quality vs Quantity? Value investors will always look for quality over quantity, but at current market valuations which most analysts’ might not call cheap are there any largecaps which are available at decent valuations?
Fund managers might have answered this question. Many stocks which MFs picked up in the month of October are trading at fair valuations, suggest experts.
Fund managers of top MF themes poured in over Rs9000 crore in largecap stocks like Axis Bank, HDFC, HDFC Bank, SBI Life Insurance, Bharti Airtel, GAIL, ITC, Tata Motors, Yes Bank, and Sun Pharma.
“These are quality names with long-term stability and visibility of growth. In fact, they are still sensibly priced compared to other smaller cap stocks. Tata Motors had gone through a decent correction and therefore should find money flowing into the stock,” Jimeet Modi, CEO, Samco Securities told Moneycontrol.
“Financial services still are favorites for the Fund Managers as the companies still have huge untapped potentials to capture, thus giving Fund Managers confidence on the growth front,” he said.
Top MF holding by market value in the largecap space include names like HDFC Bank, ICICI Bank, SBI, L&T, Infosys, HDFC, ITC, Maruti Suzuki, RIL, and Kotak Mahindra Bank.
Cash Balance:
After a sharp rise in markets over the past 10 months fund manager grew slightly cautious and started maintaining high amounts of cash balance to be deployed on corrections, if any.
However, the market has not obliged investors of not more than 3-5 percent of corrections before bouncing back to hit record highs. But, fund managers seem to be finding value in primary markets, because valuations of stocks in the secondary market might be tad expensive.
Mutual funds’ cash holding as a percentage of their total equity portfolio fell to the lowest in four months in October, as fund managers pumped money into a spate of public offerings.
According to data from Morningstar, mutual fund cash holding at 5.5% in October is the lowest since 5.2% in June. This compares with 5.7%, 6% and 5.6% in September, August, and July, respectively, said a report.
AUM hits Rs21lakh crore mark in Oct:
Mutual funds’ assets under management (AUMs) hit a record of Rs21.4 trillion in October. Overall, investors have pumped over Rs 51,000 into various mutual fund schemes in October after pulling out more than Rs 16,000 crore in the preceding month, latest data with industry body Amfi showed.
With the latest inflow, total infusion in MF schemes reached to over Rs 2.5 lakh crore in the first seven months (April—October) of the current fiscal, Association of Mutual Funds in India (Amfi) noted.
Equities still remained preferred bet among the MF investors as funds registered an inflow of over Rs16,000 crore in October, buoyed by strong participation from retail investors.
This has taken the total inflow into such funds to over Rs96,000 crore in the first seven months of the ongoing financial year, said a report. The strong inflows have pushed the asset base of equity mutual funds by more than 7 percent to Rs7.08 lakh crore at the end of October, from Rs6.6 lakh crore in the month before.
SIPs have been the preferred route for retail investors to invest in mutual funds as it helps them bring down market timing risks. The industry received about Rs5,621 crore last month through SIPs compared to Rs5,516 crore in September, said a PTI report.
