Rising liquidity in domestic mutual funds (MFs) is one of the biggest factors in driving rally on D-Street which is trading at record highs. But, there are 20 such stocks in which top mutual fund managers preferred to either book profits or exit completely.
The total assets under management (AUM) increased to yet another record high of Rs 17.89 lakh crore in the month of February 2017. On a month-on-month basis, AUM of all categories witnessed rise except GILT which witnessed a fall while balance fund saw the highest rise.
The liquidity-driven rally has already pushed valuation of many stocks near their long-term averages and a fall in holding could be a seen as a signal of topping out. The AUM of equity fund increased by 4.6 percent to Rs 4.63 lakh crore in February 2017 over January 2017.
Interestingly, the majority of the stocks in which fund managers exited completely in the month of February are from the Nifty index.
Blue chip stocks which top mutual fund managers decided to offload include names like HDFC Bank, Tata Motors, M&M, Coal India, L&T, and BPCL, IDBI Capital said in a report.
HDFC Bank has was the biggest casualty in the all the top 20 stocks as funds offloaded 25 crore shares worth Rs 32,226 crore, followed by L&T which saw a total value erosion of Rs 14,473 crore.
Other largecap stocks which are also part of Nifty in which mutual fund managers decided to bring down their holding include names like Coal India, Bajaj Auto, Hero MotoCorp, UltraTech Cements, Grasim Industries, IndusInd Bank, BPCL, Axis Bank, Kotak Mahindra Bank etc.
Fund managers also exited from mid and small-cap stocks which have been the biggest beneficiary of the liquidity wave so far in the year 2017. Fund managers from top AMCs decided to pare holdings in Equitas, United Breweries, Cadila Healthcare etc. among others.
Axis MF, whose equity schemes gave an average return of over 11 percent in the last one year has completely exited these five stocks which include names like Coffee Day Enterprises, BASF, Pfizer, The South Indian Bank, and DCB Bank.
Baroda Pioneer MF AMC which gave a return of nearly 20 percent in the last one year completely exited from stocks such as RIL, Divis Laboratories, Aurobindo Pharma, Bajaj Finance, Power Finance Corporation, and Equitas Holdings.
BOI AXA Investment Managers AMC which gave a return of over 30 percent completely exited from stocks like Bharat Financial, TCS, Atul, JK Lakshmi, M&M, Suprajit Engineering, ICICI Prudential, Dabur India, PNB Housing Finance, Emami and Colgate-Palmolive.