Investing becomes tricky, especially in a bull market when every stock seems to be on the ‘cloud 9’. Well, one way is to do your research and buy stocks on declines and the other way could be to look at the portfolio where foreign institutional investors (FIIs) or mutual funds are betting.
We don’t advise investors to blindly replicate FII or MF portfolio, but it could certainly provide you clues as to where the smart money is moving and after doing your own research investors should place their bets accordingly.
The domestic money dominated D-Street in the last 12-18 months. Retail investors have become active in markets and are slowly returning to D-Street via mutual fund route after 2008 global financial crisis which led to over 50 percent fall in the S&P BSE Sensex.
Domestic institutional investors (DIIs) poured in over Rs 36,000 crore since 2016 and over Rs 1,00,000 crore since March 2015 when Sensex last touched mount 30K. The large part of the money came via systematic investment plans (SIPs).
“Healthy SIP book is strongly supporting fresh inflows in equity oriented mutual funds. Equity oriented MFs have witnessed the inflow of over Rs.2 trillion since May 2014,” Tushar Pendharkar, Head of Research, Right Horizons Investment Advisory Services told moneycontrol.
“During May 2014-Feb 2017, equity MFs witnessed average monthly inflow of over Rs 6,000 crore, out of which Rs 4,000 crore came from SIPs. We believe that monthly SIP book in equity funds is expected to remain in the range of Rs 7,000-10,000 crore in coming years and would continue to provide huge funding to MFs to counter FIIs selling pressure,” he said.
In the largecap space, MFs heavyweights stocks for the financial year 2017 include bluechip names like HDFC Bank, ICICI Bank, SBI, Infosys, L&T, ITC, Maruti Suzuki, RIL, IndusInd Bank, and Sun Pharma, according to Morningstar data.
Stocks in which MFs increased their allocation in March include names like ITC, ICICI Bank, SBI, IOC, Infosys, Sun Pharma, GAIL India, L&T, and Tata Steel.
In the small and midcap space, MF heavyweight stocks for the financial year 2017 include names like the Federal Reserve, Max Financial Services, Tata Chemicals, Ramco Cements, Voltas, Cholamandalam, CESC, Fag Bearings, Balkrishna Industries, and Sundaram Finance, according to Morningstar data.
Stocks in which MFs raised their stake in the month of March include names like Equitas Holdings, EIL, Tata Chemicals, Max Financial Services, Techno Electric, IDFC, Shriram City, Gruh Finance, Atul and Canara Bank.
Top stocks where FIIs raised stake for the month of March include names like Fortis Healthcare, Manappuram Finance, Eveready Industries, Apollo Hospitals, Sintex Industries, Kwality, Hindalco Industries, Natco Pharma, Century Ply, J&K Bank, Kesoram Industries, and Indo Count Industries etc. among others.