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 minimum 35% portfolio allocation to Large Cap (top 100 by market cap size) stocks and 35% allocation to Mid Cap (101-250 by market cap size) stocks. Remaining 30% is as per fund management.
Benchmark: Nifty LargeMid Cap 250 TRI with a change of -0.75% in January 2022 and a one-year return of 37.52%
All data as on: 31st January, 2022
This is personally one of my favourite fund categories. I have often been caught saying like an ad salesperson – stability of large cap, growth potential of mid caps.
But, when you look at the AUMs, you will see it’s not much of a favourite of investors apart from Mirae. In fact, it really is Mirae Emerging Bluechip which first got the AMC much popularity. Even now investors with high value SIP refuse to let go of it, concentration risk in the portfolio be damned.
Within the category, it is a 50-50 sort of a performance with 5 funds beating the benchmark and 5 getting beaten. When it comes to the one-year performance, it’s only Sundaram, Kotak and DSP though which show an under performance.
As for the AUM, HDFC has skipped two place with an AUM jump from about Rs. 3,700 Crores to Rs. 5,500 Crores. Turns out, in the process of consolidation the scheme has absorbed the HDFC Long Term Advantage as well two of their close ended schemes.
In case of the expense ratio, HDFC sees an increase of 0.09% to a very high 1.28% (in terms of direct schemes) while Sundaram sees a cut of 0.12% to come down to 0.74%.
Market Cap Allocation
SBI has introduced a hint of foreign equity in their Large & Mid Cap fund with the addition of 1.34% into Cognizant Tech.
Sundaram has increased it’s overall equity exposure by increasing allocation in both Large and Mid Cap stocks.
HDFC has increased it’s Large Cap allocation by about 5% while reducing it’s mid cap allocation by almost 3%!
Invesco has done about a 3% swap between Large and Mid Cap, increasing the former and reducing the latter.
Top 5 sectors
There’s not a very significant sectoral shake-up in the funds.
HDFC sees a fair increase in their allocation to Finance, thanks to new positions in HDFC, Cholamandlam Financial Holdings and REC. Not just that, Software has been beefed up to move it from fifth to second biggest sector with an increase of 0.70% in Infosys and new positions in Persistent Systems, TCS, Eclerx, HCL Tech and Wipro! This is either a hyper shopping spree or a legacy from the funds merged into it.
For Invesco, there is a minor switch between Auto and Consumer Non Durables for the fifth and sixth places.
Top 10 stocks
There is a lot of hodge podge activity within individual stocks in the category. I will limit myself to some of the broad trends.
While Axis continues to stubbornly stay clear of ICICI Bank, the stock has cemented it’s position in all the other funds as numero uno.
Within banking, Axis bank and SBI are two others which have seen an increase across the board, often beyond the price rise that they saw in the month. In fact, Axis saw new position in SBI Large & Mid (1.05%) and HDFC Large and Mid (0.12%).
Zomato took a bit of a beating this month. Canara Robeco completely exited it’s 0.97% allocation. HDFC slashed it to half, while Aditya Birla and Axis retained only a third each.
Oberoi Realty has found some favour with a 0.17% increase in Canara Robeco and new positions of 0.92% in Kotak and 1.21% in Sundaram.
Within Pharmaceuticals, some of the major movements come in with Kotak exiting a full 0.91% in Dr. Reddy’s while Sundaram added a new allocation of 1.04%. DSP added a full new allocation of 1.15% in Lupin.
There is more confidence seen in Reliance with SBI almost doubling allocation by increase of 1.59% and HDFC increasing it by almost half with an additional exposure of 1.45%.
Cholamandlam Investment and Finance finds more favour this month with Axis almost doubling it’s position with an increase of 1.91% and Sundaram integrating a new position of 0.72%.
HDFC has increased it’s allocation by 1.45% in Reliance and 1.96% in HDFC Bank and a new position of 1.95% in HDFC. Looks like they are taking the responsibility of stabilising group company prices J
Check out the other categories and what the funds there were up to: