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 25% each in Large, Mid and Small cap stocks
Benchmark: Nifty 500 50:25:25 TRI with change of 5.14% in August 2022 and a one-year return of -7.46%
Data as on: 30th August, 2022
The AUM ranking remains unchanged this month.
Nippon has slashed it’s expense ratio in this fund too, by 23 basis points bringing it down to 1.12%. In the camp of sharply rising TER, we have two funds this month – Aditya Birla by 11 basis points (now at 0.76%) and SBI by 24 basis points (now at 0.81%).
ICICI has raised the number of stocks by 4 (settling in at 83) while Quant has reduced it by 5 (to go down to 55).
The returns report card in this category too is completely in the red for the month of August 2022.
Market Cap Allocation
Nippon has reduced it’s allocation to Large Cap by about 2.06%, simultaneously resulting in a slightly reduced equity exposure as well.
SBI has beefed up it’s Mid Cap allocation by 2.48%, with some small simultaneous trims in the other two market caps and a slight reduction in overall equity exposure.
ICICI has reduced it’s small cap allocation by a hefty margin of 3.86%, taking it borderline to 25.40%. There is a resultant reduction the total exposure taking it down to 90.87%.
The biggest hacking has come about in Axis. There is an almost 6% reduction in Large Cap allocation, some increases in Mid Cap (0.35%) and Small Cap (1.45%) with a reduction in overall equity allocation of 4.19% as well.
Top 5 Sectors
Axis has massively chopped off the Avenue Supermart exposure, down from 2.95% to 0.65%. This has led to Retailing being edged out by Construction in the top 5 sectors.
Aditya Birla sees an organic swap between Pharma and Finance, with the latter making it to the Top 5 Sectors this month.
Quant seems to have lost all faith in the banking sector with three big exits – ICICI Bank (2.75%), Bank of Baroda (1.30%) and Canara Bank (1.16%). Even with the new inclusion of Kotak Mahindra Bank (1.70%), the sector has been displaced from the second highest to out of the top 5 completely. The fund continues to reaffirm it’s faith in Adani Ports & SEZ with a 0.91% increase, taking the stock up to 5.10%. This also elevates Transport to the second highest sector. There is another big change with a massive increase of 4.95% in Ambuja Cements, which takes Cement & Cement Products out of nowhere to the third highest sector allocation. Phew! Quant Active fund management seems to have kept very very busy on their trading terminals last month.
There is an organic swap between Chemicals and Industrial Products in Sundaram, with the latter making it to the top 5.
Top 10 Stocks & Movements
I think Multicap is the category where fund managers seem to fulfil all their trading aspirations. Atleast with Nippon we see quite a few entries and exits. Five stocks have been exited out of – Bharat Electronics (1.20%), Hero Motocorp (0.56%), Can Fin Homes (0.38%), Godrej Agrovet (0.24%) and AIA Engineering (0.19%). Within these, the last two had a short run of a mere four months. To balance it out, there are seven new entrants – Equitas Small Finance Bank (0.39%) and Orient Cement (0.02%) are back in the fund after a break of three months. Then there are the others – Sona BLW Precision Forgings (0.65%), Lupin (0.51%), Motherson Sumi Systems (0.51%), Max Healthcare (0.23%) and JK Lakshmi Cement (0.02%).
SBI has just one big new allocation – 2.28% in the current favourite Auto Ancilliary stock of Sona BLW Precision Forgings.
For ICICI, two pharma funds have an elevated allocation – Alkem Laboratories by 1.21% (reaches 5x it’s previous allocation to 1.51%) and Sun Pharma by 1.02% (now at 2.03%). On the other hand, J.B. Chemicals and Pharma has been trimmed by 1.00% to a barely-there 0.01% position. Reliance Industries also gets a 1.80% haircut, more than halving down it’s allocation to 1.50%. The entry and exit list is super long! To keep it a little sane, I will make an exception just one time for this fund and limit the listing to those with a 0.50% allocation. The stock exits include Dixon Technologies (0.46%), Go Fashion (0.51%), GMM Pfaudler (0.52%), Metropolis Healthcare (0.60%) and the big one Voltas (1.43%). The entrants of more than 0.50% include Muthoot Finance (0.61%), Bata India (0.69%) and Lupin (0.77%).
Considering Large Cap as a sector sees such a reduction, Axis has trimmed off many of the category stocks. Apart from Avenue Supermart mentioned above – Infosys is cut by 1.51% (now at 3.53%), HUL by 0.91% (now at a miniscule 0.15%), TCS by 0.89% (to less than half at 0.79%) and L&T by 0.82% (now at 1.03%). Mahindra & Mahindra is the only stock which sees a substantial hike of 1.09% (now at 1.68%). The fund has also exited two stocks – Pidilite (0.59%) and Bandhan Bank (0.32%).
HDFC has been much more placid in the category. It simply has a new 0.57% position in Ramco Cements.
Kotak has increased it’s allocation in Kalpataru Power Transmission by 0.90% (now at 2.16%). The fund has exited three stocks – Greenply Industries (0.72%), Coromandel International (0.26%) and Dhanuka Sugar (0.20%).
Aditya Birla has slashed it’s allocation in Whirlpool by 0.97% leaving it at a barely-there 0.08%. The fund has also exited five stocks – Alkem Laboratories (0.83%), Hindustan Aeronautics (0.54%), Aicon Castalloy (0.16%) and Clean Science and Technology (0.13%). To balance it out, there are five new entrants as well – Mahindra & Mahindra (1.05%), Cummins India (0.64%), Dreamfolks Services (0.53%), Blue Star (0.20%) and Mahindra Logistics (0.14%).
Every month my aching fingers ask me why does Quant have to take the word Active in their fund name so seriously! This month is no different. Apart from the changes mentioned above, the allocation for Escorts has been increased by 1.07% (now to 2.06%) and by 1.17% in NTPC (to more than 3x at 1.58%). Apart from the new banking entrant, there are four more new stocks – Oracle Financial Services Software (0.95%), Tata Consumer Products (0.37%) Reliance Industries after a break of just July 2022 (0.33%) and Maruti Suzuki (0.29%). Beyond the banking exits, there are more to the list – UPL (3.35%) is the biggest one, Infosys (1.11%), Wipro (0.22%), ONGC (1.64%), Glenmark Pharma (0.69%), Tata Power (0.36%) after a mere two months and PNB Housing Finance (0.36%) after just three months.
Invesco has reduced it’s allocation to Reliance Industries by 0.95% (now at 4.33%). There are two new entrants in the stock lineup – Whirlpool (0.96%) and Dreamfolks Services (0.91%). It has also exited the 1.42% stake in Mphasis.
Sundaram has reduced it’s exposure in C E Info Systems by 0.87% (now at a mere 0.40%) while upping the ante in United Breweries by 0.99% (up to 1.46%). The fund has exited three stocks – Tata Motors (1.18%), MCX (0.67%) and Clean Science and Technology (0.57%).