Before I start off on any analysis in this segment, even at the cost of a repetitive bore I will put forth this disclaimer. All fund schemes are taken as direct. However, even if you are a direct investor, hire a financial advisor that you trust who can guide with investments. Pay for your advice.
Fund category definition: Funds with no restriction on market cap allocation or number of stocks
Benchmark: Nifty 500 TRI with a change of -4.23% in May 2022 and a 1-year return of 8.08%
Data as on: 31st May, 2022
In terms of AUM, SBI has edged out Aditya Birla very slightly.
In terms of expense ratio, HDFC has increased it by almost 10% to reach 1.06% in direct, while the regular has remained mostly unchanged at 1.72%. ICICI is another one which has increased it’s expense ratio by 8 basis points to reach 0.29%. This is quite an increase considering there was a time when the expense ratio was hovering between 0.11-0.17%.
When we look at the month’s returns, only 3 funds have under performed the index, namely UTI, Aditya Birla and Axis. However, when it comes to the 1-year returns, the tables are turned and only three funds have outperformed of the 9 (ICICI is yet to complete an year) – HDFC, Parag Parikh and Franklin.
Market Cap Allocation
Large Cap allocation has increased by almost 3% for HDFC to touch 75%.
The overall equity allocation had reduced for Parag Parikh by about 2%, which is especially reflected in a further cutting down of it’s foreign equity allocation to 23.21%.
Franklin has increased it’s Large cap exposure by almost 2%, taking it’s overall equity exposure up to 97.05%.
Motilal Oswal has cut down it’s Large cap exposure by almost 5%, bringing down it’s overall equity exposure by about 2% while redistributing the remaining in Mid and Small cap stocks.
Top 5 sectors
HDFC sees the Software sector go up from fifth highest to third highest.
In SBI, Consumer Non Durables (or FMCG) moves all the way up to the fourth spot on the back of the sole stock ITC where the allocation has been beefed up from 3.30% to a big 4.54%! On the other hand, Mining & Metals has edged out of top 5 with a reduction in the two stock allocations – Hindalco (down from 2.68% to 2.00%) and Tata Steel (down from 1.08% to 0.94%).
In Franklin, with a complete exit from the Mahindra & Mahindra position of 1.04%, Auto as a sector has slipped from the top 5 sectors. It’s place has been taken up by Construction, represented by L&T although the gap between the two sector allocations is wafer thin.
Top 10 Stocks & Movements
The main change in kotak is a reduction of 0.89% in it’s allocation to Jindal Steel & Power, bringing it down to 2.37%.
HDFC has some significant changes. Despite a further fall in share price, Infosys allocation sees a 0.83% increase taking it up to 5.83% and at the fifth highest spot. TCS also sees a new position of 1.92%. The stock had last been in the portfolio in December end at 0.22%. HDFC Limited has also been beefed up by 1.20% to reach a respectable 3.58%.
Parag parikh has reduced it’s allocation to Amazon by more than 20%, bringing it down to 5.06%. This is not a job done just by price, as the share price slipped only by 4% in the month.
SBI seems to be the limelight hogger this month in terms of substantial changes. Two big chops – HDFC Bank (reduced by 2.28% taking it one notch down from numero uno to the second position) and Axis Bank (reduced by 1.07%). Simultaneously, there is a new banking entrant with a 1.15% position in Bandhan Bank. Two big increases – ITC (by 1.24%) and SBI (by 1.82%). The fund has also completely exited it’s 1.40% position in L&T Infotech.
ICICI has taken a big 1.43% position in the new logistics entrant – Delhivery as well as increased it’s allocation to Mahindra & Mahindra by 0.82% further cementing it’s position as the highest stock at 8.63%.
Axis has increase it’s allocation in ICICI Bank by 0.91% helping it to edge out Bajaj Finance for numero uno spot. It has also cut down it’s Divi’s Laboratories allocation by 0.87% bringing it down to 1.93%.
In Franklin there is one big entry and exit to be noted – A full 1.04% exit from Mahindra & Mahindra and a brand new 1.94% position in Reliance Industries.
As for Motilal Oswal, there were so many changes that I had to double check I got my facts right. The fund has under performed so miserably that the management seems to be on board with trying everything. Plus, with just about 31 stocks, a lot of movements end up being above my substantial benchmark of 0.80%. In two stocks, there has been a significant reduction – Vaibhav Global is reduced by 1.33% to go down to 4.13% whereas Zomato is a mere shadow of it’s earlier presence which is now down to a miniscule 0.43% from the 2.16% last month. There are also three big exits – Bajaj Auto (2.74%), Britannia (1.01%) and Alkem Laboratories (1.00%). There are also three new substantial entrants – Tube Investments (2.43%), Campus Activewear (2.03%) and Gujarat Gas (1.24%).