Mutual funds witnessed net inflows of over Rs 2,900 crore in May 2023 as equity markets hovered near all-time high levels. The inflows via Systematic Investment Plan (SIP) route hit a record of Rs 14,749 crore last month as against Rs 13,728 crore in April this year, data released by the Association of Mutual Funds in India (AMFI) has showed.

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The largecap funds registered an outflow of Rs 1,362 crore, while midcap funds saw an inflow of Rs 1,196 crore. Inflows into smallcap mutual funds rose to Rs 3,283 crore in May.

"Going ahead, stronger inflows from the mutual fund space in equities are expected on positive macro numbers and the current fair value of Nifty," said Feroze Azeez, Deputy CEO of Anand Rathi Wealth.

The data showed that key stock additions by mutual fund houses in largecaps included Indus Towers, Adani Total Gas, Tata Elxsi, HDFC Life Insurance, JSW Steel, Nykaa, Zomato, UPI, Housing Development Finance Corporation, Hindalco Industries, whereas they trimmed holdings in Kotak Mahindra Bank, Torrent Pharmaceuticals, Hindustan Aeronautics, Hindustan Zinc, Macrotech Developers, Eicher Motors, Life Insurance Corporation of India, Hero MotoCorp, Indian Oil Corporation, Pidilite Industries.

MFs have added around 3 lakh shares of Adani Total Gas last month, taking their holding to 13 lakh shares from 10 lakh shares in April. The holding of MFs in value terms in the firm is at Rs 89 crore during the month.

Meanwhile, MFs shareholding in Nykaa surged to Rs 2,841 crore during May as against Rs 2,498 crore in April after buying 2.35 crore additional shares.

Mutual fund houses also bought as much as 7 crore shares of Zomato last month, raising their holding to Rs 4,785 crore. The value of MF holdings in April stood at Rs 4,043 crore.

On midcap and smallcaps

The key additions in midcap stocks were Vedant Fashions, Vodafone Idea, Clean Science And Technology, Colgate-Palmolive (India), Aditya Birla Capital, Coforge, Laurus Labs, Piramal Enterprises, IDFC First Bank and PB Fintech.

In midcaps, MFs sold stakes in Indian Railway Finance Corporation, Max Healthcare Institute, Steel Authority Of India, Union Bank Of India, Sona BLW Precision Forgings, Bandhan Bank, The Indian Hotels Company, Aditya Birla Fashion and Retail, Kansai Nerolac Paints, Tata Chemicals.

On the other hand, key additions in smallcaps included Jupiter Wagons, Astra Microwave Products, HEG, Globus Spirits, Mazagon Dock Shipbuilders, Ujjivan Financial Services, JTEKT India, Graphite India, Amara Raja Batteries, Marksans Pharma, and reductions were in Easy Trip Planners, Railtel Corporation Of India, Nocil, Time Technoplast, Mastek, Matrimony.Com, Manappuram Finance, Route Mobile, Gujarat Narmada Valley Fertilizers & Chemicals and Elin Electronics.

The mutual fund industry has gained momentum due to factors such as strong GDP growth, controlled inflation levels, and balanced liquidity in the economy. The fundamentals of the economy and corporations are strong, Azeez said.

Earnings growth is positive for most sectors, except for healthcare, metal, and oil and gas. However, the top three sectors preferred by mutual funds are banking and financials, auto, and capital goods.

(Edited by : C H Unnikrishnan)

First Published:Jun 13, 2023 12:24 PM IST