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 -5.24% in May 2022 and a one-year return of 8.90%
Data as on: 31st May, 2022
I love the idea of this fund because it just gives quite a balanced exposure to all market caps. In my view, especially for beginners who do not want too many funds, this can fulfil so many needs like growth as well as stability.
Since it is still a recent category, funds are of two types – either those that changed the stripes of existing funds or new launches in the past few months or a year. Hence, for the next few months I won’t include a 1-year performance for the funds in this category.
In the May performance, only Sundaram and Quant have under performed while the other funds have managed to stay above the benchmark levels.
While there isn’t any change to the AUM rankings, there are quite a few changes in expense ratios and the number of stocks as well.
Nippon has increased it’s expense ratio by a very big 0.58% (which amounts to about 70% of it’s existing expense ratio). Now the expense ratio for Nippon Multi Cap is at a very expensive 1.39%. HDFC has increased it’s expense ratio by 7 bps taking it up to 0.45%. Aditya Birla seems to have taken a leaf out of the Nippon book with a hefty increase in AUM of 12 bps but still landing at a very respectable 0.31%. Invesco has also increased it’s expense ratio by 6 bps to come up to 0.80%.
As for the number of stocks, a lot of funds still seem to be in their initial build-up stage. SBI increased it’s stock count by 5 (going up to 34). Axis increased it by 9 to land at 67. Quant also has 6 more stocks to it’s portfolio bringing the number to 60.
Market Cap Allocation
Nippon has shaved a bit off from Mid and Small caps to increase it’s Large cap allocation by about 2%.
SBI’s buying spree means an increase of equity exposure by about 18%, split into Large (4.65%), Mid (3.34%) and Small (10.06%) in varying degrees. Clearly, the fund seems to have found maximum value in the small cap space.
ICICI has reduced it’s small cap allocation by almost 2% with a resultant reduction in the equity exposure.
Axis has increased it’s exposure by about 6.45% with most of the buying in the small cap space (4.57%) and some in mid caps (2.41%).
Kotak has mostly been shopping on the Large Cap aisle with an increase of 6.41% in the allocation with a 5.60% increase in the overall equity exposure as well.
Top 5 sectors
In SBI, with hefty increases in both it’s textile stocks Page Industries (increase of 1.31%) and KPR Mill (increase of 2.59%), Textiles is now the third highest sector for the fund edging out Metals & Mining from the top 5.
In Axis, with the allocation of Pheonix Mills more than doubling to 2.44%, the story has flipped as compared to last month. Construction has edged out Consumer Durables.
Top 10 stocks & Movements
In Nippon, Linde India sees a further trim of 1.05% reaching 4.97%, yet maintaining the highest stock allocation. SBI also sees a similar 1.07% reduction to bring down the allocation to 2.41%. Another stock trimmed by the fund is HCL Tech by 0.79% to go down to 3.22%. Bajaj Finance is now a part of the fund with a 1.31% allocation.
SBI was yet again the epicentre of action this month. Six stocks with substantial beefing up – KPR Mill by 2.59% (now at 4.27%), Page Industries by 1.31% (now at 3.21%), ICICI Prudential Life Insurance by 1.16% (now at 1.87%), Endurance Technologies by 1.04% (now at 4.05%), PVR by 0.86% (now at 3.75%) and V-Guard Industries by 0.83% (now at 2.13%). There are also 5 new substantial entrants – LIC (3.06%), Divi’s Laboratories (2.35%), Go Fashion (2.17%), Paradeep Phosphates (1.92%) and Timken India (0.95%).
ICICI has exited it’s 1.21% position in Angel Broking.
Axis has beefed up three of it’s stocks – Fortis Healthcare by 1.18% (now at 1.34%), Pheonix mills by 1.37% (now at 2.44%) and Cholamandlam Investment and Finance by 1.50% (now at 2.40%).
In Kotak, there is a reduction beyond the price drop for Jindal Steel & Power, by 1.18% to land up at 0.90%. Allocations in four stocks have also seen a substantial increase – Infosys by 1.58% (now at 1.62%), Maruti Suzuki by 1.39% (now at 4.31%), ITC by 0.88% (now at 3.07%) and NTPC by 0.80% (now at 2.87%).
In Aditya Birla, just one big change. It’s the second consecutive month of increase in the Reliance allocation, this time a big 2.14% taking the stock to the second highest position.
Quant is one fund that’s never short of action. This month is no different. Vedanta has seen a 1.72% drop in allocation thanks to a 22% fall in stock price. The stock now has a stock allocation of 5.97%. ITC on the other hand has cemented it’s position as the biggest stock, increasing by 1.93% to 8.12%. Ambuja cements also sees a 0.87% increase to climb up to 2.59%. There are two noteworthy stock exits – Aurobindo Pharma (1.61%) and Indiabulls Housing Finance (1.45%). There are also two substantial entrants – Easy Trip Planners (1.78%) and Bank of Baroda (0.81%).
Invesco sees trimming in two stocks – Gland Pharma by 1.15% (now at 0.95%) and Birlasoft by 1.12% (now at 0.94%). Reliance Industries sees a substantial increase of 1.48% to go up to 5.49%. The fund has completely exited it’s 0.92% position in Fino Payments bank while entering a hefty 1.32% in the new kid on the block, Delhivery.
Sundaram is one of those rare funds where Bharti Airtel sees an increase of 0.92% to reach 1.94%. The fund has also exited three big positions – L&T (1.50%), Jubilant Foodworks (1.06%) and Ultratech cement (0.87%).